I prefer to call wealth inequality a non-issue although nowadays it has become a habit of left-leaning politicians, media pundits, students and activists to give a bellowing cry about the allegedly sheer evil and tyranny that is wealth inequality (these people will be referred to as redistributionists in the article). This act of righteous class warfare is necessary they argue, for the rich are too rich and it is hurting others and, important if one wishes to garner votes, it is hurting you.
The redistributionists continue: if only wealth was more spread out, we’d solve most of the world’s problems and be on the road to utopia before you know it, with end-acstage wealth redistribution allowing everyone to fly their unicorns twice a day. I’ve exaggerated that last point as I have been forced to fill in the blank by the redistributionists as they are unclear about what benefits their policies are going to generate. Their sole argument is that the world would be more just and fair which is based on what is ethical, an overly subjective viewpoint. Nevertheless, how can one argue against the principles of justice and fairness? Furthermore, who even wants to? But are justice and fairness really what the redistributionists would achieve?
To determine what is a fair distribution of wealth, whether someone has a right to the resources they have attained or whether someone has the right to take the resources of others, the situation is too great to determine these answers based on purely ethical lines of argument. Instead, the use of logic and rational thinking must be employed and through this method, a moral conclusion can be discovered. The redistributionists believe that people having vast amounts of wealth relative to others is a sign that they have achieved this through improper means and it is always the case that the wealthy are unjustly hoarding their wealth or have stolen from those who are not wealthy. The redistributionists often attribute the blame on free market capitalism, but it is under laissez-faire and supply and demand economics where wealth is earned rightfully.
The free market holds at its centre that people are individuals so should remain at liberty, not as clones to be directed by an omnipotent state, which leads to them having different strengths, talents and pursuits. The attributes of the individual generate their value which is the equilibrium on the supply and demand graph, the point where supply and demand cross with supply being what the individual can and is willing to provide whereas demand is what consumers desire. If there is a shortage of a section of the workforce, say electricians, then the price to employ electricians is higher than it would be if these workers were found in abundance because competition is fiercer due to far fewer electricians being available.
Another example is experience: Everyone has at least zero experience meaning that the supply is large but as the level of experience grows, the supply becomes smaller and smaller. Consequently, more experience translates to greater efficiency and reliability within a given field so there is more demand from businesses which is often why earnings rise with age. For the owners of capital, the big business bogeymen in the eyes of the redistributionists, it is the risks they take which ensures their just reward. They are hedging their bets on goods and services which they believe consumers will desire enough of so that they can cover the cost of running the business and hopefully make a profit. Now here’s the moral superiority of the free market system: To better yourself, you must serve others who must also serve you in exchange. You do not dedicate your lives to slaving away for a king, a commissar or a master race. You still must serve others, except this is on a voluntary quid-pro-quo basis, whether that be between buyer and seller or employer and employee. Consumers are the centre of the laissez-faire system (and that’s all of us) as it is the consumer who demands the goods and services they wish to consume so to stay afloat, businesses compete amongst themselves to provide for these and must do so as efficiently as possible. In the end, it is the consumer who decides the amount of wealth others deserve showing that wealth inequality is not a sign of stealing on a grand scale but reveals who has served society the best in a world of scarce resources.
To take the wise words of Jordan Peterson: Hierarchies in the world today are based on competence, not power or subjugation. All in all, the necessity to satisfy the desires of others through voluntary interactions in order to gain wealth in the first place (what Adam Smith referred to as the ‘common good’) makes the system just and fair whilst also creating a logical distribution of wealth. To put the burden of proof on the redistributionists, is there any other way of justifying how much wealth one is entitled to? How much money does one need to possess before they are considered too wealthy? The redistributionist’s tabling of who should own what is completely arbitrary, illogical and is not a result of compassion, it is a result of greed with the Cato Institute (libertarian think tank) reporting that opposition to income redistribution rises when incomes do. It is not wealth alone which must be redistributed – it is the wealth of others. This makes sense given that redistributionist celebrities and politicians always enter the realm of virtue signalling as I don’t see Bernie Sanders (sorry for picking on him again) giving away one of his three houses to a homeless person.
The redistributionists also believe in the notion of a fixed pie which means that wealth is a fixed sum; so for someone to gain more, someone must earn less, a typical zero-sum game. This is why the redistributionists get confused over the difference between wealth inequality and poverty, mistakenly viewing them as interchangeable. If this was the case, wealth would never increase, and humanity would only have caves and woolly mammoth carcasses to redistribute. However, the pie grows in the form of rising living standards because of businesses, who are fighting for your money, trying to gain the edge through innovation where the effects of which can be seen all around us, from the cars on the road to the technology you use daily. To someone living 100 years ago, contemporary western living standards would not belong in the realm of monarchies, it would belong in the realm of science fiction.
To be fair to them, the redistributionists are correct in assuming that fortune has been gained illegitimately but this can’t be applied universally. A bank robber earns money illegitimately through their illegal acts and in similar vein although unfortunately not illegal, the practice of corporate cronyism where government gives undue advantages to businesses in the form of subsidies, bailouts and regulatory legislation so they have an unfair advantage over competitors and/or become ‘too big to fail.’ Both the former and latter are improper methods of attaining wealth because they are clear violations of private property rights, the latter because it is subverting private property rights as consumers do not directly dictate how their resources are dispensed in the market.
Unfortunately, this problem is not uncommon causing some western democracies, in particular the United States, to be referred to as oligarchies. Corporate cronyism distorts the free market, creating a skewed distribution of wealth by restricting the power of consumers in favour of those who can afford the lobbyists and campaign donations so if you are concerned that wealth inequality allows the very wealthy to buy the politicians, you don’t have a problem with wealth inequality, you have a problem with people buying politicians. However, instead of solely trying to eliminate corporate cronyism (redistributionist politicians are very often implicated in this practice), the redistributionists have instead opted for a sledgehammer blow by declaring that all vast sums of wealth are eligible to be seized.
The popular method to supposedly solve wealth inequality is to heavily tax the rich and use the tax revenue to fund social programs for the poor. The redistributionists want excessive welfare programs which have been shown to trap the poor in poverty, not lift them out, which in a huge case of irony can further increase the wealth divide. Nevertheless, using taxes to support those in society who desperately need help should happen and the wealthy paying a greater percentage of taxes is legitimised by the simple fact that they earn more but when this is done with intent to deliberately target the wealthy is where immorality sets in because individuals, wherever they are on the socio-economic spectrum, should only pay enough in taxes to fund basic social services such as education, a judiciary system, national defence, a (minimal) welfare state and so forth.
I would like to conclude this article with the words of former US President Calvin Coolidge: “A government which lays taxes on the people not required by urgent public necessity or sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude.”