Saturday, December 10, 2011

Inequality in Perspective

Mother Jones contributor Kevin Drum says that “The heart and soul of liberalism is economic egalitarianism.” From what I’ve observed Drum has it right. Merriam Webster’s defines egalitarianism as “a social philosophy advocating the removal of inequalities among people.” The Occupy Wall Street’s 99 percent mantra is fundamentally about economic inequality. On the class warfare battlefield, the classes are defined according to wealth and income. Inequality was the underlying theme of President Obama’s much-discussed Osawatomie speech.

What is it about equality that makes it the foremost policy objective of liberals? Why do they apparently have the belief that equality is synonymous with justice and fairness?

There are a number of problems with making equality a policy objective. Foremost perhaps is it’s a whole lot more complicated than its proponents might believe. Liberals seem never to take the effort to analyze or diagnose the sources of what they see as problems. Their concern rarely penetrates the surface. Those who are the most upset about inequality never seem to reflect on why there is economic inequality in the first place or what other societal goals we would have to sacrifice in order to achieve it.

The kind of equality liberals focus on is economic equality. Why do they fixate on that one dimension? There are, of course, several explanations. Liberals see income leveling as a cash cow. The government needs money, wealthy people have money, ergo, go get ’em!

Other reasons include the fact that liberals believe that money can buy happiness. It also demonstrates how much they are ruled by envy.

Liberals believe that wealth causes poverty. Whether or not they realize it, they are Marxists. Marxism is an ideology based on the belief that owners unfairly expropriate wealth that should be going to labor. Marx would be proud of the Occupy Wall Street protesters. Marx’s “labor theory of value” is not so much a theory as a lame attempt to sell the exploitation myth.

A well-known quote from The Communist Manifesto by Marx and Engels is “The history of all hitherto existing society is the history of class struggle.” That is a gross distortion of history, but it is a perfect synopsis of the bedrock philosophy of liberalism. The left perceives the world as a battle between the oppressed and the oppressors.

The equality crusaders rely on what could be called a “quantity theory of good and evil.” The enemy has been quantitatively defined, rather than the usual qualitative approach. It consists of ranking the population from top to bottom as measured by income or wealth. The degree of evil corresponds to the percentiles. Those in the hundredth percentile, the so-called “one percent,” are especially evil. The quantitative method excuses them from actually having to think about the flesh and blood individuals in the one percent. It provides an easy way for simple-minded people to know who to hate.

This way of defining villainy makes it a renewable resource for class warriors. If the current population of the top one percent got fed up and moved to Australia, there would be a brand new top one percent to demonize.

If equality is a prerequisite for happiness, we will never be happy. Even if it were possible to achieve economic equality, numerous other kinds of inequality would still exist — beauty, IQ, athletic ability, health (physical and mental), creativity, and talent, to name just a few.

Obviously, equality is unattainable. Making it a precondition for happiness is an extremely bad idea. It makes as much sense as saying you can’t be happy unless the planet stops rotating — “I simply must have daylight 24 hours a day!” Liberals would have a much higher likelihood of being happy if they accepted inequality as a fact of life rather than something to be battled against. If we can’t have fairness and justice without equality, then we will never have fairness and justice. As is the case with the rest of liberalism, equality is a utopian fantasy.

For the sake of argument, let’s grant that less inequality would be a good thing. As is true of all objectives, more equality can only be achieved at a cost in terms of other objectives. If we insist on cutting the economic pie into equally sized pieces, we will end up with a smaller pie since it would eliminate any economic incentive to produce.

Most people who earn high incomes have made significant sacrifices to do so. They typically have stayed in school longer than most people, studied harder, worked longer hours, and taken more risks. Do we not feel they ought to be rewarded for these sacrifices? Isn’t being rewarded for such behaviors itself an important aspect of fairness? There is simply no way to distribute income that is “fair” in every way.

The left’s obsession with equality is the primary reason they despise the market. A market economy generates unequal wealth and incomes. That bothers them so much they are willing to forego all the advantages of a market economy.

In regard to many of life’s most important dimensions we are, in fact, equal. Most important is the fact that “death is the great equalizer.” Sooner or later we all die. No one, no matter how wealthy, lives forever. Rich or poor, if you eat too much you’re probably going to gain weight. If you act like a jerk you will have no real friends. In many ways, life treats us all the same. The same basic rules apply to us all.

Both liberals and conservatives care about equality. They differ, however, in regard to what they mean by equality. Conservatives want equality of opportunity, liberals want equality of outcomes.

In his book Free to Choose Milton Friedman wrote, “A society that puts equality — in the sense of outcome — ahead of freedom will end up with neither equality nor freedom…. On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.”

Cuba is one of the left’s favorite countries. Almost everyone in Cuba receives the same income: $15 a month. Grinding poverty in a country in spite of their amazing natural and human resources, but at least they have economic equality! (And, of course, “free” health care.) Cuba is a case study illustrating the real cost of making economic egalitarianism “the heart and soul of liberalism.”


Inequality in Perspective December 9, 2011

Ron Ross Ph.D. is a former economics professor and author of The Unbeatable Market. Ron resides in Arcata, California and is a founder of Premier Financial Group, a wealth management firm located in Eureka, California. He is a native of Tulsa, Oklahoma and can be reached at

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