The Income Inequality Bogeyman

Although modern social engineers have long bemoaned the evils of income inequality, it is not the source of those evils.With all due respect to the new Pope, income inequality is not a problem in and of itself. In fact, income inequality is absolutely essential to a healthy growing economy. If the economic structure does not reward productive behaviors with greater incomes, then there is no economic reason to engage in those more productive behaviors. Achieving complete income equality is a Marxian ideal and would completely wipe out incentives for the very productive behaviors that generate societal wealth. Maintaining income equality for a sufficient period of time would also eventually achieve another important Marxian ideal, which is equal distribution of wealth. This is Marxism. If we were to wipe out income inequality, it would inexorably lead to the redistribution of all wealth; but in the end, we would only manage to achieve equally distributed poverty. The greatest social experiment of twentieth Century, International Communism, has dramatically demonstrated the complete failure of the entire Marxian social ideal. It is utterly foolish to even start down that road again!

"Rich Man, Poor Man, Beggar Man, Thief:"
The Fallacy of Taking From the Rich to Give to the Poor

When you rob from a rich man and give the booty to the poor you commit several crimes. First you rob the poor man of his incentive to improve himself. Then you rob the rich man of an opportunity to enrich his soul through voluntary charity, or better yet to offer profitable employment to the poor man. Consequently, you rob the poor man again of the opportunity for employment that a good investment by the rich man would have provided. But ultimately you do yourself the greater harm when you deceive yourself by justifying your crimes with some lofty ideal.

Jonathan Reed
December 4, 2013