Neither do I

Don Boudreaux, of Cafe Hayek, explains why he doesn’t care about income inequality. I agree. At the end his post, Boudreaux adds a great comment from Steve Horwitz.

I also agree with a couple of comments to the post that say that concern for income inequality isn’t necessarily “envy elevated to public policy,” as Boudreaux claims at one point.

While I think envy plays a role for some of those concerned with the income-inequality-shiny-object, I think others are motivated by what they view as unfair processes for achieving wealth, which is also a concern of Boudreaux’s.

It’s just that Boudreaux and these folks have different views on what constitute unfair processes. Which, I believe, should take the discussion to the next stage: What are those unfair processes and why are they unfair?

Boudreaux and libertarians generally see wealth acquired through market activities as fair and wealth acquired by scratching the back of a politician as unfair.  But, others tend to see it the other way around.

But, those who see it the other way around don’t explain the processes they deem as unfair. They assume income inequality is proof that the processes were unfair.

Here’s something else I’ve noticed. Ask them about the wealth Steve Jobs earned before his death or that of their favorite movie stars and you’ll hear why these particular wealthy people deserve it. It’s because they produced something these folks personally value.

Ask them about the wealth of an oil or pharmaceutical company CEO and you’ll get a sneer.

Their idea of “unfair processes” generally is their own arbitrary assessment of whether the person deserves the wealth or not.

 

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9 thoughts on “Neither do I

  1. Let’s take it to the next level then. What are those unfair processes? How do we level the playing field without handicapping the players? (Are those the same question?)

  2. I’ll start!

    When the government says you must hire a certain percentage of (pick your favorite sex, ethnic group or SIG) in order to qualify for federal funds or to bid on a federal project, that’s unfair (actually, it should be illegal. As noted in my previous posts “fair” is a relative or normative term. I may think it’s unfair that Wally charges $X for a membership, but if Jones agrees to give Wally $X for a membership and Wally agrees to give him a membership for $X, as long as they both keep their contract, that’s what I call fair. Legal has to do with what the law (government) says.) But for the sake of this discussion, I’ll use unfair and fair to denote actions or rules that I think the government (us) should make illegal or legal respectively.

    When the government demands that banks make loans to certain applicants or to a certain percentage of (pick your favorite sex, ethnic group or SIG), that’s unfair.

    When the government says you get a break on your taxes because you didn’t produce as much as someone else, that’s unfair.

    When the government says you get a break on your tuition (or that a school must admit you or a certain number of folks of your (pick your favorite sex, ethnic group or SIG) background) simply because you belong to (pick your favorite sex, ethnic group or SIG), that’s unfair.

    Basically, anytime the government says that they’re going to favor some group based on some unrelated characteristic of that group, that’s unfair. Likewise, when the government says that they’re going to punish you because you’re “too productive” and instead reward others because they’re “less productive”, that’s unfair.

    What do all these “unfair” practices have in common? They all grant special favors to some group of voters in an effort to pander for votes. The politicians are willing to forfeit our nation’s real prosperity by trading favors for votes when the end goal is to feather their own nests.

  3. Margaret Thatcher explained the problem with the liberal mindset that blindly attacks income inequality (the income gap) – which they label as “unfair” – rather than addressing the absolute well-being of the so-called “poor” (of which, in the US, when considered in global definitions of poverty, there are very few, if any).

    The left is more concerned with achieving their notion of fairness, which means that the income gap is smaller – even if this means the poor make less (as long as the rich suffer disproportionately greater losses) – than with improving the well-being of the poor.

    Those who seek fairness in terms of equality of outcomes are fools. Those who promise it are politicians intent on their own gain at the expense of the fools. Both are socialists – by definition (even though the state may not hold the physical title to the means of production, when it controls it to such a great extent, that is de facto ownership).

    The government should be in the business of protecting each individual’s personal property (that is the person himself as well as his possessions). That is what encourages people to become more productive. Instead, the government infringes on people’s property rights – the exact opposite of what our government was established to do – and dampens productivity.

    Equality of opportunity means someone’s belonging to a certain sex/ethnic group/etc or gaining favor with a politician (through cash, family ties, votes etc) doesn’t gain them an advantage over other citizens. This is fair. Equality of outcome means that because one belongs to a certain sex/ethnic group/etc, the government will intervene to guarantee that that person’s results are the same as everyone else’s – no matter what the person’s qualifications, level of effort, skills, etc. That is unfair.

      • Mike’s example is awesome because my last name is Jones and I got completely confused for a second.

        Is there unfair process outside of the context of government? If so, what does it look like and is there any way/reason to address it?

        • Sorry for the confusion! (I’ll try to use Smith next time – unless that’s Seth’s last name)

          As far as unfair systems outside of government, slavery comes to mind. Other than that, when people call something “unfair”, it’s often that they don’t like the results after the fact. Wally brings up a subtle, yet important, point when he asks about “processes” or “systems” rather than results. Often processes or systems or rules that are mutually agreed upon end up producing results that are unequal and the “losing” party retrospectively either labels the process as unfair, e.g. disparate impact is an extreme example, or the results as unfair. However, it would be statistically unlikely in any “game” for tie (equal outcomes) to be the usual final score. Indeed, as we have discussed before, if the final outcome is always going to be a tie score, why play? Or translated to economics, what’s the incentive to work (versus not work) if there is no difference in your outcome?

          Wally, I think you would enjoy Murray Rothbard’s “Man, Economy and State”, especially the first few chapters. I have listed a link for a free pdf version:

          http://mises.org/Books/mespm.PDF

          Rothbard’s approach to economics is essentially a deductive one based on the premise that humans act and that they do so by engaging in conscious actions towards chosen goals. From this primordial fact – that humans act – we can deduce various economic axioms.

        • Sure, unfair processes exist outside of government. But, unfair is in the eye of the beholder and feedbacks outside of government work better since only government can force you do something.

          For example, plenty of companies have ‘unfair’ hiring practices. No matter how many laws have been made to try to level the playing field, it’s still not totally fair to someone. I think big companies tend to promote bureaucrats instead of productive people, which I think is unfair b/c I’m not a bureaucrat.

          Outside of government, though, I have more choices and choice is the best feedback. If the unfair promotion of bureaucrats is a big enough concern of mine, I have plenty of places to choose from that may be different or I could choose to start my own business — and that is exactly the motivation that drove many entrepreneurs to start their own businesses.

          If I don’t think my kid gets his fair share of play or practice time on his soccer team, I can choose another or start my own (which I did).

          I also agree with, Mike that the ‘processes’ was a good qualifier. Obviously, a thief breaking into my house to steal my stuff is not fair nor a process. However, I’m not exactly sure what makes it fair if 51% of my fellow citizens vote to take more of my stuff than theirs’ through government.

          Great discussion, Gentlemen.

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