Politics

The Dangers of America’s Obsession with Inequality

hospice-fraud-medicare money lawmakers liberal cash debt inequality Yippee! Last week’s sell off on Wall Street wiped out more than $3 trillion in wealth. Overnight, economic equality increased. True, you and I aren’t any better off — in fact, some of those losses came out of our 401(k)s and pension plans — but the important thing is that the biggest losers were evil rich people. Warren Buffet lost more than $5 billion, Jeff Bezos more than $3 billion. All together, the world’s 500 wealthiest people lost more than $180 billion. Aren’t you happy?

Of course not. But doesn’t the mindset increasingly heard on the progressive left and the populist right dictate that you should be? We have become obsessed with economic equality at the expense of economic growth. Inequality is said to be the transcendent issue of our time. Yet a society that is rich and unequal still beats one that is poor and equal any day of the week.

It is inarguably true that modern free-market capitalism leads to inequality. It is equally true that it makes all of us richer. By most measures, most Americans were poor at the start of the last century. Indeed, if we use a definition corresponding to today’s poverty measures, 60–80 percent of the U.S. population was poor in 1900. Today just 23 percent of Americans are poor, and even they enjoy a standard of living that would be envied by the rich of a century ago.

Crucially, much of the economic progress responsible for that happy state of affairs came long before the Great Society and the advent of the mammoth welfare state we have today. “As a matter of empirical fact,” George Mason economist Tyler Cowen notes, “it is economic growth that lifts most people out of poverty, not transfer payments.” Above and beyond its ability to alleviate poverty, economic growth also brings with it all sorts of side benefits, including longer life expectancies, a better-educated citizenry, and expanded civil and political rights.

Someone else’s success does me no harm. Nor am I worse off because someone else receives a bigger tax cut than I do. Such a viewpoint stems from the misguided notion that the economy is a pie of fixed size. In reality, the size of the pie is infinite, and when it grows we are all better off, even if some people get bigger slices than others.

To make it grow, we need ambitious, skilled risk-takers. We need people to be always striving for more. But they will only do so if they can anticipate rewards commensurate with the risks they take. Incentives matter. As Nobel Prize-winning economist Gary Becker once pointed out, “It would be hard to motivate most people if everyone had the same earnings, status, prestige, and other rewards.”

None of this means that there are not some people who take advantage of the system. Crony capitalism — the reliance on government favors, subsidies, and protection from competition — is a curse. Nor does it mean that some people are not left behind. The creative destruction that fuels a dynamic economy guarantees that there will always be shocks and temporary dislocations. Racism, sexism, and xenophobia lock too many people outside the system. We should be doing everything we can to ensure that everyone has the necessities of life, and that they can be full participants in a growing economy. Those are all legitimate concerns that need to be addressed.

But the answer lies with more economic freedom, not less. If, in our obsession with equality, we kill the golden goose, we may quickly find out that the society we thought we wanted isn’t all it’s cracked up to be.

From - National Review - by Michael Tanner

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SARGE
3 years ago

My saving grace is if and when inequality becomes a thing, I’ll be dead. Who really thinks hard working people will stand for giving away $$ so that the poor can be rewarded. I read an article back in the 70s that talked about creating a welfare state. The reason given then was from a competitive stance. Thousands of people competing for the same job. Yeah, i know, its already here. But if you like living on the dole, well, in a sence, thats good. Live down there, and waller in your poorness. Some people actually like lying around, smoking their cigs, watching tv, getting their food stamps. They actually think they got it made. So…..we have to keep them in their pens, grazing on their hay, other wise they may want to get out.

Hank
3 years ago

It’s a paper loss; it’s only recognized if you sell the stocks for a loss. Or, you could wait for the stocks to rebound. But, the wealth of this nation rides on the coattails of the rich. Every purchase of a foreign good (including American goods made in foreign countries) causes money to exit our economy. Selling American goods to other countries brings the money supply back home. Ask yourself, when was the last time you purchased a foreign good? When was the last time you sold something abroad?

PaulE
3 years ago

The title of this article is erroneous to start with. The ONLY people obsessed in America with so-called inequality are those on the left. They want to make everyone, but themselves of course, equally poor, hungry and miserable as they think that will create Utopia on earth. The fact that history has proven virtually every instance of forcing what the left calls social and economic equality, but is more correctly known as socialism or communism, always leads to the same disastrous outcome over and over again. Want to see a practical, real-world example of what equality looks like? Get on a plane and fly to either Venezuela, North Korea, Cuba or any of the other current humanitarian **ll holes of suffering. If that is honestly what you prefer, then burn your American passport upon landing and enjoy wonders of your new homeland.

Rik
3 years ago
Reply to  PaulE

Hi PaulE, don’t you just love hearing all this so-called “equality” crap? … I hope but seriously doubt that NFL players have learned a lesson. Do they really think that they would have the opportunity to make millions playing a game in a Socialist/Communist country? Ask the professional baseball and basketball players from Cuba, Venezuela or such whether they could make these outrageous salaries in their home countries? I guess it’s true, you truly only miss something when you lose it and can’t get it back. Have a good weekend and keep preaching the word.

PaulE
3 years ago
Reply to  Rik

HI Rik,

Yes, I am seriously tired of all these spoiled, ignorant liberals, who have no clue what they’re advocating for in support of “equality”, that think their lives would be so much better under socialism. Enjoy the weekend.

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