What’s Wrong With Income Inequality?
Numerous articles have recently been published warning of the dangers of “GROWING INCOME INEQUALITY!” Rich people are reported to be accumulating wealth at a faster pace than the lowest income citizens. Oh, the horror!!! Okay, really, am I missing something? So…, what’s wrong with that? I suppose that the authors of those articles presumed that the evils inherent in “INCOME INEQUALITY” should be obvious to everyone. But, at the risk of appearing obtuse, why is income inequality a bad thing?
In my simplistic way I have always assumed that inequality is in the nature of things, since some people are clearly born with greater gifts and talents than others. In that way, life really is not fair. At an early age I came to understand that my lack of natural physical ability meant that I would never be a highly paid professional athlete. I also came to understand that I have very little musical talent, and that I am somewhat deficient in mathematical ability. As I have grown older I also realized that certain people have a knack at making money that I lack, and that their ability to earn money seems unrelated to intelligence. That also seems unfair. Why should people who are less intelligent than me make more money than I do? The obvious reply is “why not?”
So long as the financially successful obey the law and refrain from defrauding people, why shouldn’t they make as much money as their ability allows? Arguing against income inequality seems akin to arguing that NBA players should wear ankle weights to reduce the national vertical jump inequality, or that talented musicians should not be allowed to play difficult musical scores because musical skill has been declining over the last ten years, resulting in growing musical inequality. In a word, what’s desirable about income equality, and why is it different than these other forced-equalization ideas?
My guess is that some people oppose income inequality because they think any system that allows the rich to get richer while the poor get not exactly poorer, since their incomes also increased, but at a slower rate, so, let’s say– not significantly richer, is inherently unfair. The unspoken assumption of the “equalization proponents” seems to be that the growing income of the rich is somehow causing the poor to be poorer. The usual solution that is recommended to fix this inequality is some form of income redistribution by taxation. But my question is– what’s right about taking money by force from someone who earned it, in order to give that money to someone who did not earn it?
Again the response normally goes something like this-The rich should not be allowed to continue to get richer at the expense of the poor. Yes, but again, exactly how does the success of the rich occur “at the expense of the poor?” Or to put it another way –how does the success of the rich cause the poor to be poorer? The simple answer is that it doesn’t. In fact, the opposite is true. When the rich work to get richer by building their businesses they create more jobs and opportunities for everyone. Well, if that’s true, why is there a growing disparity in income? While I have seen no studies on that issue, my guess is that the lowest income tiers may be stagnant because of a decline in work ethic and an increasing attitude of dependence on the type of government entitlements that are suggested by the income equalization proponents.
Rather than bemoaning income inequality shouldn’t we encourage those with financial talents to be as successful as they can be in order to create more jobs and opportunities for everyone? At the same time shouldn’t we encourage everyone else to emulate their example, rather than vilifying success? The genius of the American system is that there are no legal barriers to success, and that even the poorest person can become rich by hard work and talent. This country is the land of opportunity precisely because our history is replete with stories of people who were born into abject poverty, but were able to achieve great wealth by hard work.
Taking money by force out of the hands of the financially successful seems akin to taking a Stradivarius out of the hands of a talented concert violinist. In both cases valuable assets are taken away from those who can make the best use of them, and the public suffers because available resources are not being used to their fullest potential. It also sends the message that there is something wrong with financial success, and that those who strive to achieve more should have the fruits of their labor taken from them.
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