There are busybodies all around us. Many of them are incensed about income inequality. It would appear that some people have more wealth than others. Who knew? This phenomenon can come about in any of several ways.
For example, if B robs A, then the former will have more money than he would otherwise have had, and the latter will have less. This, to be sure, is to be regretted. Theft is theft, and is certainly incompatible with a civilized order.
But suppose the disparity arises from very different sources. Posit that A works hard, saves his money, and makes important contributions to the economy. B in sharp contrast, is lazy, uneducated, unproductive, and wouldn’t understand the concept of saving if it bit him in the nose.
Why should this be considered problematic as it most certainly is, on the part of our friends on the left? Why should this justify seizing some of A’s hard-earned wealth and transferring it to B?
According to the busybodies, this imbalance is unfair. Nonsense. Nonsense on a pogo stick. Yes, it cannot be denied that sometimes this divergence stems from the fact that A chose his parents wisely and B did not. As a result, the former has an advantage over the latter concerning both genetic and financial inheritance. This might well have resulted in a better early childhood for A than B.
Does this justify B stealing money from A? Hardly. If the poor man pulled a gun on the rich man and seized his wealth, we all know just how we should consider the impecunious one. He would be characterized as a criminal and clapped into prison. Suppose this very self-same act emanates from a majority vote under democratic procedures. Does this change anything? It is difficult, in the extreme, to see why it does. If it was a blatant mugging in the first instance, it is hard to countenance why a bunch of burglary supporters, even an electoral majority of them, should change anything. (Perhaps, in the extreme, all of the latter ought to be incarcerated for engaging in aiding and abetting a clear robbery.)
What is so great about the democratic process when it encompasses blatant theft? Hitler, after all, came to power through an electoral system. He did not seize power via a coup d’etat. This scarcely justifies his actions thereafter. No more than does a plebiscite to forcibly transfer funds from the rich to the poor.
The next argument of the busybodies in behalf of income or wealth equality involves the diminishing marginal utility of money. The more wealth you have, the less that any additional amount adds to your well-being. If we as a society take $1000 from an affluent person and give it to a impoverished one, the former may well have to light his cigars with a $50 dollar bill, instead of his accustomed $100. He will lose little utility thereby. Where those funds may spell the difference between going to bed hungry or not for a needy individual. Moreover, suppose it is not a matter of mere hunger but spells the difference between actual life or death for a starving person. Then, surely, this compulsory transfer would be justified, it is argued.
The difficulty with the latter scenario is that if it were actually true, then, not only would rich people in developed economies be in effect murderers, but so would the poor (their problem is more of obesity than starvation). Moreover, the reason people are actually dying from lack of food has to do with the economic system under which they suffer, e.g., socialism. The egalitarianism supported by these busybodies actually boomerangs and hurts very poor it is supposedly aimed at helping.
Then, there is the problem of incentives. Soaking the rich like New York City under Mayor Zohran Mamdani and California with Gavin Newsom as governor, and they will emigrate to greener pastures, and/or hire highly productive tax lawyers and accountants (who would otherwise be producing goods and services valued by consumers) to protect them, tie up government in expensive lawsuits. Likely, if they remained, they would be less productive.
Consider, also, the incentives of the recipients. They are receiving largesse taken from others since they are destitute. They, thus, have a reason to remain in that status. If they get a job, accept a raise, save some money, they will be cut off from this spigot.
Another difficulty with this busybody “reasoning” is that it is illicit to add up the welfare of the two, and conclude it has increased since the money transferred enhances the welfare of the recipient more than it reduces that of the donor. This is called “interpersonal comparison of utility” in economics and is properly considered a logical fallacy in that discipline. Who knows? It is entirely possible, were such comparisons legitimate in the first place, that the poor will use what he receives to get drunk and sick, while the man forced to donate these funds could have used them to cure cancer.
Yet another problem with this train of thought is that it is “too good.” It requires absolute income or wealth equality, something that even Rawls, the master of coercive egalitarianism, does not necessarily espouse. For, as long as there is a dime’s worth of difference between the “rich” and the “poor,” this argument would justify forcibly taking a nickel from the former and giving it to the latter.
Then, there is the question of economic mobility over time. Here, we are concerned not with the fact that A has more money than B, but with what this state of affairs will persevere generation after generation.
States Harvard economist Roland Fryer on this issue: “I’ve long believed that what sets America apart is the possibility of growing up in hardship and raising your children in comfort.”
He continues: “Although economic mobility is a core American ideal, the U.S. now ranks below the Nordic countries, Canada, and much of Europe in overall mobility, including the classic rags-to-riches story of starting in the bottom and working your way to the top. Across rich nations, only about 8% of children born in the bottom fifth of parental income reach the top fifth as adults. The chances are 11% in Denmark and 16% in Sweden.”
But why the dismay? The progeny of professional athletes often follow in their parents’ footsteps. Ditto for musicians, white and blue-collar workers, actors, doctors, the list goes on and on. Given that these job categories shift value over time only slightly, it should occasion little or no surprise or apprehension that economic differences should remain constant as much as cross-sectionally as well over time series.
What of the logical consistency of these busybodies? If its supporters adhered to this requirement, they would be compelled to apply their egalitarianism to other phenomena other than wealth; namely characteristics that cause these divergences in the first place
Yo Yo Ma is perhaps the best cellist on the planet. Why not equalize musical ability just a tad? Over time, we can prevent him from teaching this skill to his children. Cross-sectionally, we can forbid him from using rosin on his bow. That will cut down on the quality of notes emanating from his instrument.
Ussain Bolt is the world record holder in the 100 meters (they really ought to give him a speeding ticket). We can insist that he not train his progeny in this skill. That will reduce the chances of it being spread unequally to the next generation. As for him, we can put some lead into his racing shoes. Hey, if we weigh him down sufficiently, even I, a plodder, might able to beat him.
In horse racing, the goal of the handicapper is for a dead heat amongst all entrants. That is the egalitarian ideal. Kurt Vonnegut introduced his “handicapper general” in his magnificent reductio ad absurdum of coerced equality. Smart people had to wear headphones that would emit noises so that they could not think any better than the rest of us.
The point is, if it is justified to equalize income and wealth, it must follow logically that the same applies to the characteristics that determine these considerations in the first place.
If we go down this particular garden path, where will the next Salk vaccine come from? Who will uncover the next truth in physics following up on E=MC2? How will we ever colonize Mars?
Monetary egalitarianism, and its logical implications even more, spell disaster for humanity.
The ultimate refutation of this policy is that it would justify the compulsory transfer of eyes from those with two of them to blind people. The latter would gain from sight with one eye, far more than the former would lose.
