connect with us:
Follow us on Facebook
Follow us on LinkedIn
Follow us on Google+

Who Cares About Income Inequality?

Apr 11, 2016

Related to:

We’ve all heard that the American Dream is vanishing, and that the cause is rising income inequality. The rich are getting richer by rigging the system in their favor, leaving the rest of us to struggle just to keep our heads above water. To save the American Dream, we’re told that we need to fight inequality through tax hikes, wealth redistribution schemes, and a far higher minimum wage.

But what if that narrative is wrong? What if the real threat to the American Dream isn’t rising income inequality—but an all-out war on success?

What’s stifling opportunity in America is not income inequality, but political equality. Instead of the government protecting our equal rights, it is granting some people special privileges and shackling others with special burdens.

Whether it’s cronyism, the minimum wage, a growing tax burden, or an out-of-control regulatory-welfare state, anyone who aspires to improve his own life by his own productive effort—rich, poor, or anywhere in between—is finding that America is becoming less and less hospitable toward success.

The critics of inequality are right about one thing,  The American Dream is under attack. But instead of fighting to make America a place where anyone can achieve success, they are fighting to tear down those who already have.”

The real key to making America a freer, fairer, more prosperous nation is to protect and celebrate the pursuit of success—not pull down the high fliers in the name of equality.

What today’s debate comes down to is fairness—and the critics of income inequality are perpetrating a profound injustice: they are vilifying the innovators who drive human progress, and they are crippling the ability of those starting out at the bottom to rise to the top.

Here are three keys to remedying that injustice:

• Fortunes are fair when they are honestly earned. People deserve what they can earn on a free market, as the result of productive activity and voluntary trade.

People like Steve Jobs get rich because thousands or millions of people willingly pay for their products and services, in transactions that are win/win.  Inequality increases, but no one is made worse off. They deserve their fortunes.

• Political equality necessarily leads to income inequality. When the government protects our equal rights to life, liberty, and the pursuit of happiness, it’s inevitable that there will be huge differences in economic condition. 

Different people create vastly different amounts of wealth.   The only way to equalize incomes is to throw out political equality and have the government unjustly punish some people and unfairly reward others.”

The critics of income inequality are not champions of equality—they are opponents of the only kind of equality that matters: equality of rights.

• To revive opportunity, don’t level down—liberate.  Millions of American’s are struggling today, but the solution is not to level down those at the top. It’s to liberate all producers so that every American is free to rise as high as his ambition and ability will take him.

The greater opportunities and outcomes enjoyed by some people don’t hold others back—they make others’ success easier.  What actually restrains opportunity is the arbitrary power we have granted the government: to intervene in our affairs, to pick winners and losers, to put roadblocks in the way of success, to hand out wealth and other special favors to whatever pressure group can present itself as the face of ‘the public good.’ A free market is a fair market.