In my last post, I challenged a common assumption about equality and justice—that inequality per se is inherently unjust, and therefore that the gap between rich and poor is as well. In what follows I contest another popular notion touted by redistributionists—that unequal wealth as such causes hardship for the poor.
As I argue in my recent National Affairs article,
[T]he implicit assumption behind the case for the injustice of income inequality is that the wealthy are the reason why the poor are poor, or at least why they cannot escape their poverty. If this claim were true, it would be much easier to connect income inequality with injustice, and so to justify a redistributionist agenda. Yet this assumption rests on another economic premise that itself is highly dubious: the idea that income is a zero-sum game.
In a functioning market economy, however, the total amount of income is decidedly not static. Societies can generate new income. If someone’s slice of the economic pie gets bigger, therefore, that doesn’t mean another person’s slice gets smaller. In my article I point to studies that show that, on average, those in the highest and lowest income categories have seen their economic conditions improve over the past several decades, albeit at different rates.
These findings undercut the primary argument for treating income inequality as evidence of injustice. It’s simply not true that the success of the rich harms the poor or prevents the poor from escaping poverty.
Obsessing about economic inequality also distracts from the legitimate goal of helping those who need extra help to thrive.
[Such a focus] identifies justice with looking over one’s shoulder at how others are doing. But viewing our neighbors as rivals not only reinforces the false notion that income is a zero-sum game, it also subtly cultivates a desire that those neighbors not perform better than we do. This is not just or conducive to a healthy civic spirit. It’s mere envy.
Moreover, if the size of the income gap is really the central moral issue in our economic life, the attempt to close the gap through redistribution would require decreasing the amount of income at the top. But what would we think of a doctor who aimed to narrow the “health gap” between his sick and healthy patients — by making his healthy patients a little less healthy. Not only would we refrain from calling such a scheme just, we would condemn it as morally perverse. …
Just as we don’t help the sick by injuring the fit, we don’t help the poor by soaking the rich. … We should be focusing on improving the prosperity and well-being of all—with special attention to helping those in poverty escape it.
When it comes to income, inequality is largely a distraction. We need to shift moral attention back where it belongs: to helping those in need overcome the sources of true material deprivation (such as failing schools, family breakdown, and government corruption). In 2012, may our economic debates move beyond the gap between rich and poor to questions of growth, mobility, and enduring prosperity. With that focus we can better nurture conditions that allow everyone the opportunity to rise and flourish.