“Envy is an unsound basis for government policy”

Don Boudreaux says it well:

Here’s my summary take on this issue [income inequality]: unless someone steals from you, you have no business fretting over how much money that person has relative to how much money you have.  If you insist, absent any such thievery, on fretting over such a thing, you are deeply immature, excessively materialistic, and obnoxiously antisocial – and, thus, unworthy of having your opinions taken seriously by serious people.  (Envy is an unsound basis not only for government policy but also for personal ethics.)  And if someone did steal from you, then what you should fret about is that person’s thievery rather than about his or her monetary wealth relative to your own.  After all, if the thief’s theft raised his or her income to a level more in line with your own, you surely wouldn’t shrug and excuse the thievery on the grounds that it helped to equalize incomes – and you’d be appalled if the police did such shrugging.

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Kling’s 3-axis model and income inequality

I’d like to extend a warm welcome to a new commenter at Our Dinner Table, Adam, who pointed me to this article: Rising Riches: 1 in 5 in US reach affluence.

Arnold Kling’s 3-axis model can help us predict what various folks might believe about income inequality and why they will continue to talk past each other.

Liberals operate on the oppressed-oppressor axis. The rich are the oppressors and the poor are the oppressed. They believe something must be done (government action) to ‘fix’ this situation. This view seems to be expressed in the article.

Conservatives operate on the barbarism-civilization axis. Rich people earn their money based on traditional values of strong work ethic and responsible choices. The poor may be more responsible for their position that liberals believe. So, using government to ‘fix’ income inequality erodes the values of work ethic and responsible choices.

This view is also expressed in the article, but by a successful pharmacist who “grew up on food stamps, but now splurges on…Hugo Boss shoes,” which I took as a subtle attempt to discredit his view.

Libertarians (as if anyone really cares what libertarian think) operate on the freedom-coercion axis. As long as the rich didn’t violate anybody’s freedoms to become rich, then all the power to them. Using force to try to ‘fix’ income inequality violates freedom, so is bad.

I fall into a mix conservative/libertarian camp here. Though, I am sure there are some poor people who are ‘disadvantaged’ and not merely victims of their own bad choices and unwillingness to take advantage of the tremendous opportunity this country has to offer (like a free $100,000 education).

I have a question for people who believe the ‘disadvantaged’ explanation.

Have you considered that encouraging responsible behaviors may be a better way to help the disadvantaged than redistribution?

Don Boudreaux, of Cafe Hayek, has some good thoughts on the article in his post, A Barrier to Reducing Income Inequality??? 

 

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.

 

Your wealth does not creat my poverty, part two

In the most recent EcontTalk podcast, host Russ Roberts interviews Steve Kaplan of the University of Chicago about income inequality.

I recommend it.

Early in the podcast, Roberts quips:

Recessions are bad for the rich. If you care about inequality per se, recessions are great.