Income Inequality…Yeah? So What?

Shouldn’t someone somewhere make the case as to just why income inequality is a bad thing?

In all other things, inequality is a good thing. Sports — inequality lets us have them. Without “inequality” — ie winners and losers — sports wouldn’t exist, at least in any meaningful way.

Prices? Inequality is great. That allows us to “shop around,” and compare and save money and use our efforts to manipulate the markets in ways favorable to us.

People’s appearance. How about that? Every person looks different from every other person. If you think about it, that’s a good thing. Imagine a world in which we all looked exactly alike. First of all it’s absurd, but second it’s a completely undesirable condition, as there would be no way to identify individuals — except to make them all look different, but that violates the hypothetical — there’d be no way to know who did what when and to whom. And on and on…

Don’t you think your wife is the prettiest, the smartest, the nicest in the world? Inequality. It’s a good thing!

How about if everyone were to think the same…like some big Borg or the cells in one big brain. Well, I suspect no one thinks that’s the way to go either. On Star trek, everyone assumed the Borg were bad, and Captain Kirk did make an impassioned defense of human individuality. (I couldn’t find it on YouTube, but I remember it from an episode of the show. 🙂 ) He didn’t have to do that — we all know that we like our own bad individual selves.

More to the point, no one contributes equally to society, to work, to humanity. All contribute differently, and more or less at different times of their lives. Should they all be paid the same?

How about the baseball player who has a banner year? Should he make the same money as the journeyman utility player?

If we all do differently, and act differently and perform differently and contribute and work and function differently, why on earth should we all be paid the same?

Ok, so income inequality is not necessarily a bad thing. “But,” you’ll say, “we have too much income inequality!”


Sez who?

What even is that?!? Who even knows how much is “too much,” and how did they find out, and what formulas did they use, and what classes did they take?

While I agree that too much of anything is a bad thing — “bad” is built into the concept of “too much.”  Who, however,  is the one to decide just how much income inequality is too much? Barack Obama? Who died and made him king?!? What if I say that a dude who makes $10 billion in a year — now that’s income! — is just signaling that it’s now possible to make $10 billion in a year, and that’s a really good thing. Why is Obama right, while I’m wrong.

I agree, there can be too much income inequality. If one dude made $20 trillion one year, while the rest of us made only $1, that wouldn’t be good, at least in today’s price structure! However, that hypothetical is impossible, because while there appears to be gargantuan income inequality in that hypothetical, it’s really — except for the one $10 trillion dude — massive income equality.

But, I hear you saying, how about if everyone makes, say, $50,000 and we let the one dude make $10 trillion…wouldn’t that work.


That’s called Socialism, and it’s always failed miserably to provide even marginally acceptable living conditions for the people under its bloody thumb. And for reasons that, if they’d thought it through for more than a minute or two, even Socialists would say make its failure inevitable.

Socialism is not about equality or making people’s lives better, or “the people,” or anything high-sounding and noble, like the rhetoric used to sell it. Socialism is all about one thing: providing a gauzy, nice-sounding narrative to wrap around a tiny élite’s hunger for power, so you will let them have it. Once in power, Socialism is then all about keeping power — keeping you and me in a barely subsistence condition that makes Socialists necessary.

So, now let me pose a different question: What if today’s level of income inequality is actually too little? What if there should be more income inequality? Again, who decides what is too much income inequality, or too little, or the right amount? Between you ‘n me, I think I should decide what’s the proper level, don’t you? 🙂 But, I won’t — get to decide it, that is.

What if “income inequality” is nothing more than a measure of the total opportunity in a given economy? After all, if some dude pulls down $10 billion in a year, that means simply that it was possible to make that much. That there existed the opportunity to make that much that year.  And, of course, that some day you could make that much if you were to do what it takes.

Furthermore, if more and more people are making huge incomes, that means only that there’s a better and better chance that you could make that much too! That there is more and more opportunity out there to make a great income.

Few would say that increasing opportunity is a bad thing.

“But,” I hear you saying, “it’s not opportunity… those rich scum are taking more and more, as we get less and less.”


That assumes a “zero sum” economy that presupposes that the “pie” is finite, and that as some get more, inevitably some must get less. That is, of course, completely incorrect. The “pie’s” — the economy’s — ability to expand has no limit. Expansion of the pie represents expansion of opportunity. Instead of whining about “income inequality,” people need to seize opportunity. Or, put another way, reducing — or eliminating — income inequality serves to make the pie finite, and guarantees you will not have access to greater opportunity, to greater prosperity.

There is only one way to reduce income inequality, and that is to to take from the highest end of the income spectrum and give it to those on the lower end. However, if you do that, by definition, you shrink “the pie;” you squash the rich dudes’ incentives to do economic activity that will make make them richer — things like starting new businesses and hiring you and me to work there.

Even if they do start new businesses, they won’t hire us, because now we cost too much. Besides, with our shiny, new income equality, we choose not to work in the same jobs as before. Before you know it, you have millions with no income at all. I think most would agree that’s a bad thing.

Bottom line: it’s entirely possible that income inequality — because it is also a measure of real opportunity — is a good thing. One thing is absolutely certain: Barack Obama has not even bothered to try to make the case that it’s a bad thing. He’s said merely that we must reduce it, or get rid of it, or something. This implies that income inequality is a bad thing, but doesn’t argue that it’s a bad thing. 

Make your case, Obama…don’t just play on class envy.*

— xPraetorius

* – Telling a leftist not to play on class envy is like telling the Pope not to be Catholic; like telling a bear not to… well, you get the point.

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