Economics, Philosophy, Top Stories

Two Arguments for Inequality

Social inequality is amongst the most contentious and prominent social issues in the twenty-first century. After declining significantly in the mid-twentieth century, inequality has now reached stark levels. A recent Credit Suisse report indicated that the globe’s richest 1 percent are on track to own half of the world’s wealth. In November 2017, Forbes reported that the three wealthiest Americans now own more wealth than the bottom 160 million. The disparity between those who have a great deal, and those with much less, has grown so stark that in his bestselling book Capital in the Twenty-First Century economist Thomas Piketty warned that we might be entering a new “Gilded Age.” It would be driven by a global class of individuals who enjoy vast inherited wealth, demonstrate little allegiance to the nation state and its tax laws, and commit themselves to further entrenching their social power.

These prompts raise the question of what can possibly justify such stark inequities; especially in a global context where the World Bank estimates that in 2013 roughly 767 million individuals lived on less than $1.90 a day. Some argue that income inequalities emerge because individuals are fundamentally unequal by nature. Those with robust natural talents and valuable skill sets—the Bill Gateses and Mark Zuckerbergs of the world—will inevitably tend to get ahead of those without such abilities. But as I highlighted in a recent Quillette article, these arguments are vulnerable to the Rawlsian critique that allowing wealth inequalities to emerge because of differences in natural talents is highly unfair. Individuals did nothing to merit their natural talents. It therefore seems highly arbitrary from a moral point of view to allow natural talents to dictate the distribution of wealth in society when this has nothing to do with merit and it is entirely possible to use social institutions to rectify unfairness. Moreover, as I highlighted in the same article, the argument that income inequalities emerge largely because of natural talents doesn’t mesh with the statistical evidence that many individuals get ahead because they enjoy unearned social advantages. Indeed, one of the thrusts of Piketty’s arguments in Capital in the Twenty-First Century is that the wealthiest individuals on the planet are increasingly those who inherited their fortunes; the Koch brothers, the Walton family, and so on.

Given these factors, it is very difficult to argue that people get ahead for what have traditionally been called meritocratic reasons. Individuals with natural talents enjoy them because they won a genetic lottery. Many of those who get ahead in society came from privileged backgrounds that gave them a substantial head start, while others have to struggle from the bottom. So if inequality cannot be justified along meritocratic lines, can it be justified at all?

In this brief essay I will argue that there are two sets of justifications for income inequality. The first is the consequentialist justification given by, amongst others, Adam Smith and later by Friedrich Hayek. It maintains that inequalities can be justified since in the long run because they are necessary for economic growth that will be to the benefit of all. The second justification is more straightforwardly moral: the libertarian justification. It is best formulated in the work of Robert Nozick. The libertarian justification holds that inequalities may indeed emerge for reasons that have little to do with merit. But so long as these inequalities result from uncoerced exchanges between individuals, they are justifiable because no one was forced to do anything against their will. More importantly, efforts to ameliorate the inequalities which emerge from uncoerced free exchanges between individuals will inevitably and unjustifiably compromise liberty.

The Consequentialist Justification for Inequality

The consequentialist justification for inequality comes in many different forms but in substance it is largely the same. It may well be morally unappealing to allow individuals to acquire great wealth for unmerited reasons. Moreover, we may rightly find the selfishness and avarice which drives some individuals to be unappealing characteristics. However, we should tolerate these morally unappealing realities because the pursuit of wealth and the social inequities which result have beneficial consequences for society in the long run.

In 1705, Bernard Mandeville published his famous Fable of the Bees, often seen as a rebuttal to Christian arguments about the evils of selfishness and the pursuit of wealth. Mandeville’s apparently childish fable concerns bees living in a beehive. Initially selfish and prosperous, the bees eventually become virtuous altruists living in an increasingly impoverished hive. The lesson to be drawn is quite clear. Mandeville’s fable has long been taken as a warning against constraining the tendency of individuals to pursue their selfish ends. It is from looking after one’s own selfish needs that general prosperity emerges, as each bee produces more and works harder to better its position. Private vice becomes public virtue.

Mandeville’s ideas were systematically developed in the work of Adam Smith. In his early Theory of Moral Sentiments, Smith criticized the selfishness of human beings. In a famous allegory, he describes a man confronted with two distinct and evil possibilities:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

In the Theory of Moral Sentiments, Smith decries the propensity of selfish human beings to put their private needs ahead of the benefits of others. But, of course, he shifted course in the later The Wealth of Nations. In this work, Smith observed that we cannot expect individuals to inculcate in themselves the altruistic virtues required to make everyone better off. We must therefore channel the propensity of individuals to look after their own self-interest so that the consequences of their selfish acts are to the benefit of all. They will be guided as though by an “invisible hand” to promote the general lot of all. The way to do this, of course, is through the market system. While pursuing wealth, individual entrepreneurs and capitalists produce goods and services in competition with one another. Over time this can keep prices low and the quality of goods and services high. Moreover, while competing with one another for profit, entrepreneurs and capitalists will hire employees and establish new ventures. This ensures that even those who do not have the wealth to become capitalists can put food on their table and gradually benefit from the consequences of competitive market processes.

Smith’s argument is that the selfish pursuit of wealth, and the inequities that follow, can be justified so long as the consequence is an increase in the general prosperity of all. This line of thought has been taken up by later consequentialist thinkers like Friedrich Hayek. Hayek characterized himself as a Kantian-Consequentialist. He believed that the market operated as a system to exchange information about the value individuals attributed to given goods or services. When left alone it did a relatively good job of relaying this information, enabling the economy to grow and prosperity to gradually trickle down to all.

Hayek accepted that the entrepreneurs and capitalists who got rich in the market system were not necessarily more meritorious than others. They had simply done a better job of interpreting the value individuals would attribute to a given set of goods and services, and had provided these in an efficient manner. Other entrepreneurs and capitalists, let alone the workers, might well fall behind because they were simply unfortunate or not particularly skilled. Moreover, Hayek accepted that on occasion, when information wasn’t relayed successfully, the economy might well struggle and unemployment might increase. In such contexts, individuals who are unemployed should be cared for; both for humanitarian reasons and to retain support for market systems. But Hayek did not think that wealth should be redistributed beyond this minimal social safety net. Social planners may want to provide for the poor, but the result of their fumbling actions would be to disrupt well-functioning market systems and reduce incentives. This would ultimately lead to negative consequences for all.

The consequentialist argument has a powerful appeal in no small part because it is uninterested in moralizing judgements. Authors like Mandeville, Smith, and Hayek were not concerned to judge the poor or venerate the rich. Indeed, Smith himself wrote at length about the noxious social impact of lionizing the wealthy—an insight lost on some Republicans with a propensity to name towers after themselves. But they reasoned that the pursuit of wealth and the inequities which emerged could be justified so long as they worked to the aggregate benefit of all in the long run. This did not necessarily mean that some wealth should not be redistributed to help the very poor. Smith and even Hayek accepted the need for a minimal safety net. But we should in no way seek to produce a general equality of outcome for all. The result of such measures would be declining prosperity negatively impacting all in the long run.

The Libertarian Justification for Inequality

The second, libertarian justification for inequality is a straightforwardly moral one. It accepts that inequality may well emerge for morally arbitrary reasons. But so long as inequities are produced through non-coercive measures, we should not try to rectify the situation. To do so would require establishing a very powerful state which would invariably interfere with the liberty of all its subjects.

The most powerful articulation of this justification was given by Robert Nozick. A friend and colleague of his great rival John Rawls, Nozick was an eclectic and brilliant thinker who also wrote on the philosophy of science, the meaning of life, and even cosmology. But he is most famous for his critique of Rawls in his classic work Anarchy, State and Utopia. In this work, Nozick largely accepts the Rawlsian claim that inequalities emerge for morally arbitrary reasons. Many people who are not especially virtuous get ahead. Many who may be deserving languish in poverty. But he asks whether the fact of moral arbitrariness in the distribution of wealth can actually justify a heavily interventionist state. Nozick argues that it should not.

For Nozick, freedom is a very great value since our central goal in life is to attain a kind of authenticity. Against the Utilitarian tradition, he argues we are not concerned primarily with happiness. Instead, we want the freedom to realize our self. Drawing on Locke and Kant, Nozick argues that we should therefore possess a very significant number of rights to protect us from being used as “means to another’s ends” as if we were simply an object in the universe. This would include substantial rights to engage in free exchanges with one another to try and better our situation. This may well result in inequalities, but is that necessarily wrong?

Nozick argues that there are three criteria to establish whether an exchange is justifiable. Firstly, were the goods and wealth exchanged acquired without violence? Secondly, was the exchange coerced in any way? And thirdly, can anyone else claim possession of the goods or wealth involved in the exchange as compensation for past injustices? Nozick argues that if these three criteria are passed, then the exchange that is taking place is justifiable since individuals are freely engaging in it. No one is being forced to do anything, or owes compensation to someone else.

In a society oriented by these free exchanges, those who produce goods and services that others like will likely get rich. His famous example is basketball star Wilt Chamberlain. Such individuals may not merit their wealth in some strong sense. But they are entitled to it because they acquired it freely and without coercion. Forcing them to give up such wealth, according to Nozick, would be a very great wrong. It would necessitate establishing a very powerful state with the coercive power to force individuals to redistribute wealth according to a “patterned theory of justice” that they themselves may not agree with. According to Nozick, such a state cannot be justified since it fundamentally interferes with liberty—which disrupts all patterned theories of justice—and treats individuals as means to another’s ends.

To my mind, the consequentialist and libertarian justifications for inequality are the strongest available. As discussed in my earlier article, I do not think ‘classical liberal’ arguments for meritocracy can survive the force of Rawlsian critiques which indicate that what many take as signs of merit are actually the result of luck and arbitrariness.

There are problems with both justifications of course, which I cannot elaborate on at length. With regard to the consequentialist justification, one could follow Amartya Sen in critiquing the empirical accuracy of more hardline anti-egalitarians such as Hayek. There may be strong evidence that markets only produce generally good consequences when allied to significant capability-enhancing welfare programs. One could point to the Scandinavian countries as models in this respect. And many have contended that Nozick is overly monological in his emphasis on liberty. While liberty is indeed an important moral principle, the immense weight he grants it may be disproportionate. And indeed, Nozick himself seems to have come to that conclusion. In a later essay, published in The Examined Life, he retracted his support for the libertarian position. But taken together, I believe these two justifications offer the substantial challenge to those who would seek a more egalitarian distribution of wealth (including myself).

 

Matt McManus received his L.L.M in International Human Rights Law from the National University of Ireland and his PhD in Socio-Legal Studies from York University. He is currently Visiting Professor of Politics and International Relations at TEC de Monterrey and is writing his first book “Overcoming False Necessity: Making Human Dignity Central to International Human Rights Law” for the University of Wales Press. He can be reached at garion9@yorku.ca

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72 Comments

  1. Edward Freeman says

    Inequality emerges from reality and the price system, and the price system is necessary. Some stuff should be done (and is, for the most part) to ameliorate its worst effects. But tread cautiously, especially if you’re a person with responsibility who doesn’t understand the positive effects of prices.

  2. KD says

    The real problem with inequality–and Peter Turchin addresses this in depth–is that you get an overproduction of elites fighting for limited positions of power combined with immiseration of the masses. Elites locked out of the power structure organize the disaffected masses and establish revolutionary mass movements to overthrow the established elites, and the result is civil war, revolution and authoritarianism. I suspect the Trump phenomenon will be mild in retrospect in comparison to what is coming.

  3. Joshua Schwartz says

    On the Consequentialist justification: if the claim is
    that the level of inequality is tethered somehow to the level of shared economic growth, wouldn’t one expect higher levels of inequality to correspond to more prosperous levels of growth? That doesn’t seem to be the case in (at least) the 21st century thus far. It could also be argued that the innovation engine behind a lot of modern growth is slowing down mostly because technological possibilities are finite, which suggests we may have just lived through a uniquely verdant patch of history in which innovations raised all boats.
    If, on the other hand, the claim is merely that self-interest is a great motivator for economic activity and some inequality is inevitable, then yes, that would be true BUT would also not specify how much inequality one must tolerate to ensure properly motivated individuals. For example, would Bill Gates have created the same innovations if it has only made him 1/10th as wealthy? Surely he would have. So the actual level of his success was irrelevant – only that it was reasonably successful enough to have been worthwhile for Mr. Gates.
    I tend to believe there should be a “maximum wage”, and that CEO income (to give one example) should be tethered to some multiple of the company median wage (10x? 20x? How much more do we value an innovator’s 40-hour work week over an ordinary person’s 40-hour work week?). Moreover I think I’m moving towards some kind of hybrid market-and-state based system where there is more centralized ‘nudging’ of wages in specific areas to a place where they are commensurate with more merit-based properties (difficulty and nature of work) instead of unmeritorious elements (born talent – which should be valued but not so much that it determines one’s financial destiny). I love the thought of reconnecting value to merit. Tough to do, though – don’t want to discourage capitalistic growth or fall into socialist traps.

      • AuxPart says

        The recent recession in the US increased inequality, didn’t it? Even besides that, a connection between inequality and prosperity can’t be reduced to just recessions. Wikipedia has a more wide-ranging article on the topic:

        https://en.wikipedia.org/wiki/Economic_inequality#Effects

        There is a lot of information there along the general lines of inequality is bad, which shouldn’t be surprising. If you spend $1m of raw resources on building a bigger house, there is no benefit to society; theoretically it might incentivise somebody, but it’s probably just pure waste.

    • CED says

      Mr. Schwartz

      Economic growth isn’t properly captured by GDP tracking. The quality of life in the US today is higher than it has ever been, despite high levels of inequality. That is because many staple goods produced today are cheaper than ever due to productivity innovations. If you look at the breakdown of the CPI index, nearly every line item is neutral or getting less expensive. The large increases in housing and energy drag the whole average up to the nominal 2%. That doesn’t even take into account all the free products we have today through the internet. GDP is a crude formula calculating the dollar figures of spending which inherently omits many of the largest improvements in cost of living and internet amenities.

      The maximum wage idea gives me pause. Price floors and ceilings often carry large distortions when put into practice. If a business owner runs into his “maximum wage”, what motivation would he have to keep funding R&D to develop a new product or drive down costs for his existing products? In a free market, the theory is that people are compensated in relation to how much value they produce for others. If you create value, people will pay for it. Providing value for others seems to me to be the best definition of “merit” that precludes a slide into potential authoritarian consequences.

      Talented individuals who were taught by their parents to have a superb work ethic may not have earned those headstarts on their own merit, but if they are incentivized properly, they will use those advantages to provide value and improve the lives of others. If that incentive is removed, we will see significantly less innovation and improvement in the well being of society.

  4. I’m not surprised Nozick recanted the libertarian argument, it is one of the worst arguments I have ever heard, and am glad to see even Nozick knows it. The Rawlsian case already deals with it handily. It is crude social Darwinism of the lowest kind, a caricature of itself.

    Now, the consequentialist argument may have had a point back in Smith’s day. But Jeff Bezos earns billions every week while at least half of Americans live paycheck to paycheck, and around eighty (!) percent of Americans are in debt. If the cost to enter society incurs debt so massive it cannot be paid back (student loans, medical bills) then that is already peonage. If you had to be indebted to the state to survive, libertarians would call that slavery. But if you’re indebted to a private debt collection agency, somehow that makes it not coercive? Add stagnant wages since the 1970s plus gargantuan CEO profits, levels of inequality Smith never foresaw, coupled with a parasitic financial class that profits off of debt and calls that productive GDP, and there is no good argument for inequality. It’s just covering up the scorched Earth of a system that is going to fail once we realize wages aren’t going up, none of this debt is getting paid back, and no one is going to get to retire. Entitlements aren’t the problem – wages so low that most Americans live paycheck-to-paycheck, and families can be wiped out by debt instantly, are the problem.

    I can confidently say there is no good argument for inequality.

    • Raison la raison d'etre says

      You could not have put that better. It’s really comical how far into hogwashland people are willing to go to justify the unjustifiable.

    • “I can confidently say there is no good argument for inequality.”

      People are strongly motivated to get higher social status, and wealth is often associated with high status. So, a little wealth inequality can be useful to generate incentives for people to work harder and more efficient. Bret Weinstein talked about the law of diminishing returns in one of his videos. We can probably reduce wealth inequality a lot by having highly progressive taxes, but a society with absolutely no wealth inequality will end up like the Soviet Union.

    • ADM64 says

      Inequality arises from differences in individual aptitudes, behavior and innate characteristics, as well as circumstances. The entirety of our history showed both significant social mobility (up and down – hence the old phrase “From shirtsleeves to shirtsleeves in 3 generations”) and steadily rising standards of living. Any discussion of the current state of affairs without noting a) the current level of taxes (hidden as well as not), b) massive regulations, c) government debt and involvement in the money supply, and d) the welfare state (including government involvement in healthcare, housing, food production) is absurd and meaningless. The fact is that all of those things impose inherently greater costs and penalties on people who have less, and thus hurts them more. The fact that these things are done and justified to “help” people makes it all the more reprehensible.

      Once upon a time, Americans saved their money and lived within their means. Government created inflation in the 70s took a big axe to that. Entitlements take another huge bite. Regulation and government spending prevent capital investment, which historically was the reason for higher US productivity per capita and thus higher wages. Add to all of that our government run “education” system, which singularly fails to educate, and you have an explanation for all of the phenomena you descry. Throw in policies that reward irresponsibility (which includes that of those at the “top” – like bailing out the banks) and we have the rest of the explanation. Blaming it all on “capitalism” is both wrong and stupid.

      As to the moral justification of inequality, the libertarian argument – for want of a better term – is actually valid, Nozick’s recantation notwithstanding. People who achieve their wealth through honest productive efforts have an absolute right to every cent of it. That applies to the working poor as much as billionaires. The honest acquisition of wealth does not mean the person in question is an otherwise decent or nice person, it just proves that insofar as wealth is concerned, he is acting correctly. In my experience, the people who disagree with this have no understanding of what is actually involved in creating or managing wealth.

      • ” The fact is that all of those things impose inherently greater costs and penalties on people who have less, and thus hurts them more. ”

        This might be somewhat true in the US. It certainly isn’t true in much more functional western European countries. Like for example the Scandinavian countries.

    • Daniel PV says

      Alexander J Blum

      “I can confidently say there is no good argument for inequality.”

      I’m not so sure that anyone is “arguing for” inequality. I think the point that the writer is trying to make is;

      It exists.
      It will always exist. Its an inevitable law of nature.
      If we’re dealing with social primates (of which humans are), it can’t be eradicated.
      Any socially manufactured device to try to do away with it, will backfire.
      Any society that has tried to function under a socially manufactured system to do away with it has failed, and ends up being less prosperous than capitalist societies.

      • “Any society that has tried to function under a socially manufactured system to do away with it has failed, and ends up being less prosperous than capitalist societies.”

        The writer hasn’t investigated the Scandinavian countries then…

    • I agree. That this article fails to even include the word ‘debt’, a daily reality of the lives of a majority of Americans, is telling.

      Barbara Ehrenreich has written, both in Nickel and Dimed, and in Shakedown America, of how the poor have most of the ready cash in society and every layer of government targets the poor to relieve them of this money. Civil asset forfeiture, government theft, is rampant, and many police departments and city halls make up for GOP cuts by aggressively targeting any cash they can. The Baltimore cops/gang who stole from drug dealers were just a spin on this.

      If the US was not engaging in this continual shakedown, there might perhaps be a lessening of income inequality and, later, a lessening of social inequality, but to sit around in the meantime attempting to conjure up theories for why inequality is positive, seems rather complacent and Panglossian to me.

      *citing Zuckerberg as having some incredible skills, talent, well, what are they? One idea that saw him get in on the ground floor and establish a monopoly, and not another innovative/successful product since, just lots of buying up other companies or copying them.

    • Victoria says

      @Alexander J Blum

      Well despite your ‘confidence,’ it’s rather conspicuous how you fail to mention population growth, globalization, or immigration in the factors driving national and global inequality.

      “But if you’re indebted to a private debt collection agency, somehow that makes it not coercive?”

      Like many on the contemporary left, you want rampant consumerism without any attendant personal (or ecological) responsibility.

    • cardiffkook says

      “I can confidently say there is no good argument for inequality.”

      Actually I can provide an irrefutable argument that inequality is pretty much built into the structure of the universe. Thus arguing against inequality is as silly as arguing against entropy.

      The problem is that there are at least three significantly different ways to define “equal”. In many or most situations these definitions conflict, thus inequality is absolutely mandatory. Let me elaborate:

      1). Equality defined as fair, impartial rules. This is known as rule egalitarianism and is what most people think of when they are talking about “fairness”. The idea is that every player on the field play by the same rules. It says nothing about outcomes. The score can be 100 to zero, as long as the rules were followed and set impartially.

      2) Equality between contribution and rewards. This is where the two properties compared and held equal or proportionate are the input and the output. For example, if you promise two people to pay them $10 an hour and one works 1 hour and the other works 100 hours, then they are both paid exactly in proportion to their contribution. This is how markets tend to work (though contribution is adjusted by supply and demand factors).

      3). Equality of outcome regardless of contribution. This is what most people think of when they talk about equality, it is how most families distribute goods. Even the toddlers, who add no value and do no chores, get their fair share of the family output.

      So, back to your challenge. The problem is that when we set our rules (using definition 1) we must decide whether to go by a system 2 or system 3 distribution of goods. Since it is extremely unlikely that everyone will contribute the same amount of effort, it is extremely likely that we have to be unequal according to either definition 2 or 3.

      I could go on to belabor why advanced economies can not operate exclusively as system 3, but in brief it is because effort, conscientiousness, risk, investment, creativity, and delayed gratification are penalized (why try at all when you will get an equal share?). Thus this is your airtight, 100% solid refutation of your point, inequality is built into the fabric of the universe, and outcome inequality is not just necessary for prosperity it is desirable.

      I am not arguing against system 3 equality in its proper time and place (some work groups or teams, families and safety nets), just that system 2 is necessary and good.

  5. Skip Gallagher says

    A substantial challenge to those who would not seek a more egalitarian distribution of wealth are mobs carrying torches and pitchforks approaching the gated communities of the wealthy.

    • Sean Wood says

      Is that because wealth that rightly belonged to them was diverted to the wealthy?

      • Skip Gallagher says

        I believe Louis XVI made a similar inquiry as the blade fell, but Madame Defarge was not listening.

        • Sean Wood says

          It seems to me that a modern-day mob motivated by the goal of taking what was earned by others, and to which the members of the mob make no claim of right, will not have the same energy and staying power as the mob motivated to regain what they believe was stolen from them. So, establishing a convincing backstory is critical. Mobs are still guided by reason, as they understand it.

  6. Bill says

    First, people like Zuckerberg, Gates, and Bezos do not “earn millions/billions” per week. They have unrealized wealth with some degree of income from things like dividends and interest. A large proportion of Zuckerberg’s wealth is in FB stock and if he were to sell it, first, it would be publicized due to the mandated SEC filings, and second, the liquidation of a large position causes the stock price to drop meaning he “loses” money. Their wealth shifts up and down with the market but attempting to equate that to the wage income of the middle class provides a warped picture meant to inflame. Take, for example, the historical valuation of CEO “income” where the stock options/shares are current market priced versus historical market priced.

    The other thing missing goes to the early paragraphs discussing inherited wealth and the concept of “old money” in the example cases of Kochs and Waltons. Those points overlook that a vast majority of “old money” go broke after a small number of generations because the skills of the earlier generation which enabled the creation of that wealth was not passed down. The future generations liquidated the wealth while not regenerating. It was diluted until gone. Nate Rothschild, for example, lost 55% of his net worth in 1 year and some say he lost 80-90% of his wealth overall. The grand poobah was worth a lot but upon death and across generations that wealth was distributed over more and more descendants which multiplies expenses and outflows.

  7. ccscientist says

    Because we have a system that allows those who do something useful to become wealthy, everyone prospers. Bill Gates did not steal anything from anyone (which is not to say that some rich didn’t steal). People line up to buy Apple computers even at higher prices (I know apple is not microsoft). In this system, even ordinary people have a chance to get ahead by starting a business or being clever. I have friends that have started heating/cooling business, robotics business, IT business. This is because the system allows it and also allows Zuckerberg to get rich. Thus it is not correct to say that the rich 1% are harming others–it is only jealousy to think that way.

    • Emmanuel says

      You are perfectly right. Businessmen do not become rich by stealing other people’s money but by selling commodities or services other people are willing to buy. If you believe it is immoral for Zuckerberg to be so rich, all you have to do is to reject the product he is making his money from.
      Complaining about a person’s wealth while contributing to making him/her richer is a silly but widespread attitude.

    • AuxPart says

      Bill Gates stole plenty from others, as evidenced by their internal motto, “Embrace, Extend, and Extinguish”. They used their power to force competitors out of the market and overall, made the computing landscape worse for everyone.

    • I have used Linux for more than 14 years now, and I would never go back to either Microsoft or Apple. There is lots of innovation in the open sources world, so economic incentives don’t seem to be necessary for innovation. However, I would agree that economic incentives can be a contributing factor to increase the amount of innovations, or to facilitate more productivity and better efficiency. However, humans are really only motivated only to get higher social status, and as long as there is some possibility to increase personal wealth, we can still optimize productivity and efficiency.

      • Matt Sylvestre says

        I drive software product development and I do it for the money first and the enjoyment of the art second but status does not enter into it for me. I know many people in Tech. that are in it for status though (status in the minds of other computer shut ins ?)… It takes all kinds…

  8. Al says

    Inequality is the natural state of existence on this planet, all humans are different at the margins across multiple variables (intelligence, health, physiological traits, etc). Then there is the arbitrary nature of time and place. To be against inequality is to be against it in denial of reality.

    As to the amount of inequality, in this case money, why does it matter? All inequality and by extension human achievement is undeserved, no one choose the circumstances of their birth. Why does Bill Gates having tens of billions matter? It’s certainly no more prejudicial than someone being born in the US in the 21st century instead of Poland in the 14th century, for instance.

    Those who are against inequality also have to explain how they would deal with social status competition, since income and wealth inequality are being targeted for that among other reasons.

    • AC Harper says

      Agreed. It is a category error to conflate unfairness and inequality. Or fairness and equality.

      The real argument should be – “Given that inequality of wealth develops naturally, what level of inequality is optimum for the greatest number?”

      Total equality of wealth (Gini coefficient 0) is almost certainly harmful, for there would be fewer people merely working the land to live, or herding, or fishing. With no incentive or *means* to increase productivity.

      Arguably large inequalities in wealth (such as the USA, Gini coefficient 45) may lead to social unrest and collapse.

      But we don’t know what the optimum level *should* be – and it will vary from society to society.

    • “To be against inequality is to be against it in denial of reality.”

      Well, during most of human history there certainly was much less economic inequality than we have today. Animals have some inequality for sure, but they usually don’t acquire things, so the inequality is usually in their bodies and in their physical abilities. Anyhow, animals that aren’t physically fit usually die, so there usually isn’t so much inequality within a species.

      • ADM64 says

        There was also much less wealth. The poorest people in modern America live better than kings did in antiquity. Walter Williams noted that actual deprivation is unheard of in our country. Moreover, even a cursory look at history indicates that throughout much of it, those who had the wealth acquired it politically and had arbitrary power over others. What the industrial revolution achieved, and what actual capitalism makes possible, is for people to achieve wealth without excuses. Many people can’t stand that.

        Many people today benefit from technologies and innovations that they could never have conceived of themselves. In comparison, those who created it get a lot of money. Who has really benefitted disproportionately for their work? And who is moral? The person who creates wealth whatever the scale, or the person who knowing that he couldn’t create something himself, feels envy and a desire to destroy the creator rather than simply being grateful?

        • “Many people today benefit from technologies and innovations that they could never have conceived of themselves. In comparison, those who created it get a lot of money. ”

          Yeah, we live in a world where Scientists the highest salleries. Not in a world where people like Floyd Mayweather, Kim Kardashian and Kanye West get much more money.

      • Mountain Man says

        Zanthius, there is and was pleny of inequality in primitive human and animal communities. In many species, only select individuals get to breed. Most have status that directly constrains their access to food and other necessities. And as you said, the ultimate inequality is death, and plenty of individuals die young.

        So coming back to people present day, and applying the consequential argument, if the mortality distribution has changed for most people (i.e. most infants survive and reach adulthood), then no matter what the economic disparities, we are MUCH more equal than we were even a few hundred years ago.

      • Sean Wood says

        Well, during most of human history there certainly was much less economic inequality than we have today.

        That’s only because for most of human history everybody was dirt poor, living hand to mouth. Poverty worldwide included 94 percent of the world’s population in 1820. In 2011, it was only 17 percent. Mortality rates for children under the age of five declined by 49 percent from 1990 to 2013. http://www.who.int/mediacentre/news/releases/2014/child_mortality_estimates/en/

        The poor today in the United States are better off than kings 500 were years ago. They have access to advanced medical care including antibiotics, television, cell phones, indoor plumbing, a heated place to sleep in the winter, adequate food and clothing, access to an educational system that, if taken advantage of, will allow them to become prosperous. This has all come from an economic system that has also produced a greater difference between the rich and poor. Is it reasonable to assume that without that economic system the poor today would have made as much progress in real terms over the way most people lived 500 years ago?

        • “This has all come from an economic system that has also produced a greater difference between the rich and poor. ”

          Well, well. Although the Soviet Union was a horrible ideology for many reasons, they weren’t particularly bad with innovation. But there is no reason to think that the current economic system in the U.S. is the pinnacle of civilization. Scandinavian countries seem to be better than the U.S. in practically any comparison, and they are much more egalitarian societies than the U.S.

          • Sean Wood says

            Denmark has the highest tax rate among developed nations. But in 1960, the tax rate in the country was merely 25 percent of GDP, lower than the 27 percent rate in the U.S. at the time. In Sweden, the rate was 29 percent, only slightly higher than in the U.S. In fact, much of Nordic prosperity evolved between the time that a capitalist model was introduced in this part of the world during the late 19th century and the mid 20th century – during the free-market era. See https://ideas.repec.org/p/kud/epruwp/13-01.html and https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1300564

          • Sean Wood says

            Well, well. Although the Soviet Union was a horrible ideology for many reasons, they weren’t particularly bad with innovation.

            Maybe this explains the economic success of the Soviet Union and the high standard of living of its people.

          • “If Sweden Left The EU and Joined the US, It Would Be the Poorest U.S. State, Below Even Mississippi.”

            I highly doubt that, but even if the average saleries in Scandinavian countries might be comparable to saleries in the U.S, they get tons of benefits. Like more or less free kindergarten/education. More or less free healthcare. Better better pensions. Etc.

  9. Dan says

    I always said that classes,lower, middle, upper middle and rich, are fine but when the bottom (now nearly half of the people in the US) are confined to a life of low income and poverty, not able or barely able to make ends meet, with constantly narrowing and financially risky paths to success (not high enough wages, too expensive colleges, jobs unwilling to teach people skills etc) then that is when its a problem. A BIG problem. Being told its needed for them to suffer for the other half to survive, to me, shows the utter failure of an economic system or ideology, if inequality to this level is needed to sustain it.

  10. People are so prone to binary thinking. Either they think we should should strive for a completely equal society, or they think we shouldn’t interfere with the natural tendency towards more inequality at all. Sure, in order to optimize productivity/efficiency there needs to be economic incentives for people to move up in the economic hierarchy. But people don’t necessarily care so much about how much richer they are compared to their neighbors. They just have a desire to be perceived as richer than their neighbors. It is not necessarily a big deal if I have 50 or 100 million USD more than my neighbors. So, we can have a lot of progressive taxes, while still maintaining economic incentives to optimize productivity/efficiency.

    Lots of the problems with taxes today, arise because of competition between countries for the lowest corporate taxes. Even if I mostly just care about being richer than my neighbors, maybe I can envision an even better life for myself from moving my business to another country with less taxes. Countries also benefit from having lots of business, so they compete with each other to attract businesses. One of the most efficient ways to attract businesses is by lowering corporate taxes. To invalidate the right-wing argument for less corporate taxes, there needs to be a multilateral tax treaty which ensures that all countries have the same corporate/progressive taxes.

  11. Jack B. Nimble says

    Let’s leave old Wilt Chamberlain out of the picture for a minute [he died in 1999].

    Consider instead a classic state-run single-jackpot lottery in which each ticket has an equal chance to win the entire amount. Some money is diverted for administrative costs or paid to the state as a sort of franchise fee.

    Perfect fairness: each ticket has an equal chance to win.
    No coercion or violence: people are free to buy as many tickets as they want, or no tickets.
    Can anyone else claim a portion of the winnings? The state will typically withhold income tax from the winnings, and they can presumably be garnished in court for past debts.

    The result?

    Maximum inequality: one winner gets everything, the rest of the ticket buyers get nothing.

    The lottery passes Nozick’s fantasy of a justifiable exchange with flying colors, but does anyone really think that a system that produces maximum inequality and no social benefit is a GOOD thing?

    Now let’s bring Wilt back. He benefited from college and pro basketball leagues that he didn’t build. He also benefited, at least indirectly, from large-capacity basketball arenas typically built with funds from taxpayers who may have had no choice in the matter but to pay the tax.

    The point is that Wilt benefited from the circumstances of his birth, not just in growing tall but also by living in a country that has the infrastructure to reward sports talent on a massive scale. Most countries don’t offer those opportunities to their tall athletes. Seems reasonable to me to ask Wilt to pay back to the community in the form of a tax on high incomes that would help maintain the arenas and the roads surrounding the arenas, instead of asking the average taxpayer [who may never watch an NBA game] to foot the bill.

    • Mountain Man says

      Two comments about the lottery analogy. First, we can also imagine the “maximum equality” lottery, where every ticket wins an equal share of the jackpot (minus overhead). Hmm, reminds me of some national economic models. Second, you have ignored intangible values. As unfair as it seems, many (most?) lottery ticket buyers are poor, and get little utility from their purchase. What they do get is a momentary thrill, a fleeting dream. And that “dream value” does scale with multi-million dollar jackpots, not with the ever-more-practical and more achievable $10k prize.

      Now about Wilt, as much as he benefited from college and pro institutions, they benefited from him. Super-stars generate public attention and attraction. Alumns donate more, libraries expand, and general good results. As for community members paying taxes for things they don’t want, welcome to the real world. We ALL pay taxes for spending we dislike or despise, and may never use.

      • Jack B. Nimble says

        OK, my hypothetical lottery does have some potential social benefits:

        1…The state might put its franchise fee toward paying for public education. Some states actually do that. But that just shows that lotteries tend to be regressive taxation systems disguised as recreation.
        2…The lottery business does create jobs for people who run the lottery, print the tickets, etc.; this is a weak argument since just about any economic activity [including the illegal drug trade] creates spin-off jobs. Unlike, say, R&D, no new wealth or knowledge is being created by the lottery. Instead, existing wealth is being transferred from the many to the few.
        3…The intangible benefit when gamblers get an adrenaline rush on the thought that they might win the jackpot? The less said about this ‘benefit’ the better……..

        Inequality and freedom are ‘baked in’ to my hypothetical lottery and maybe the same is true for free-market capitalism. But that should be the beginning of the discussion, not the end. And to other commenters–please leave ‘nature’ out of the discussion. Almost every behavior that humans exhibit, including violence, theft, sexual promiscuity, etc., has its counterpart in nature. So what?

  12. Jay Salhi says

    “Individuals with natural talents enjoy them because they won a genetic lottery.”

    Usain Bolt certainly won the genetic lottery but if he had spent his whole life on the couch stuffing his face with Doritos he would not have won any medals. Attempts to mold society in such a way that those who possess special talents are not unduly rewarded will be counterproductive at best if not inevitably totalitarian.

    • ADM64 says

      Exactly. Whatever one’s attributes, what one does with them is the real issue. Even if one accepted the counter-argument, being born with an innate skill or potential would make it morally neutral. Attempting to repress it is unjustified and unjustifiable.

  13. ga gamba says

    Individuals did nothing to merit their natural talents. It therefore seems highly arbitrary from a moral point of view to allow natural talents to dictate the distribution of wealth in society when this has nothing to do with merit and it is entirely possible to use social institutions to rectify unfairness.

    I hope readers understand the evil of this idea. Taken to its logical end, people did nothing to merit their own lives since they were created by others and bestowed to them. This establishes the notion people, especially successful ones, are undeserving and it is up to “the social institutions”, i.e. the state, to then categorise attributes and talents and impose penalties. Read Kurt Vonnegut’s satire Harrison Bergeron to see how wonderful equality may be brought forth.

    I doubt many people would consider a man who’s 5’2″ and weighing next to nothing a possessor of natural talent, yet what is a successful jockey? Has he not transformed what is normally a hardship, even a handicap? What does the biblical story David and Goliath teach us? In it there are a few natural talents in conflict: Goliath’s massive size and formidable strength versus David’s courage and deadly aim. On paper Goliath was the certain victor, yet David prevailed. Why? Because our talents (or lack of) are revealed in context. How well would the genius Stephen Hawkings do if shipwrecked? He’d perish in hours and be eaten by gulls and crabs. So much for his natural talent there.

    Successful societies are those which allow its people the opportunity to transcend their limitations. This is facilitated by education and infrastructure, both physical and social, and the willingness to accept inequality when it brings improved services and goods.

    In and of themselves do talents dictate the distribution of wealth? No. I’m sure we all know intelligent or otherwise talented people who’ve attained little and mediocre people who’ve attained much.

    Consider the sad plight of Yohei Fukuda, a Japanese cordwainer. His creations are masterpieces. To buy a pair will cost you a minimum of $5000. “Five thousand dollars for a pair of shoes?!” you may exclaim in disbelief. “He must be raking in the dough.” Yet, to deduce this requires one to make several wrong-headed assumptions.

    Because all his shoes are genuinely handmade, one pair takes up to 150 hours to make. He only employs a few workers, in part because his customers want the master’s talented hands on their shoes as much as possible. Given the high price, flaws that would be acceptable in much lower priced shoes are impermissible on his. An unfortunate slip of a knife, a mis-stitch, uneven burnishing, or some other error may ruin the project, wasting all the hours and high-priced materials already invested. Surely his attention to detail, his dexterity, and the care taken when executing precise tasks is extraordinary. It was his raw talent refined over years as working as a lowly paid apprentice to create the craftsman he is today. Then, he left the security of an established firm and risked what money he saved, his credit worthiness, and his reputation by establishing his own business, one that appeals to a very small clientele. And for all this, his yearly gross earnings are a few hundred thousand dollars because he makes about 60 pairs per annum. Subtract the fixed and variable costs, and Mr Fukuda earns a comfortable living. His priceless talent, his hard work, and his willingness to accept risk isn’t making him fabulously wealthy. Or even kind of wealthy. Yet, he finds great satisfaction in the life he chose for himself.

    In contrast to someone who owns a massive shoe factory making a few million pairs per annum, why does this world-renown artist earn so little? Is this just? Has it moved us a bit further from equality?

    Our economic system imperfectly rewards innovation, risk taking, and economies of scale. If we relied on thousands of Yohei Fukadas to make our shoes, we’d be limited in choice, pay a lot, and would likely own no more than two or three pairs at any given time. Many of us would be employed in the making of shoes or in the refurbishment of second-hand shoes to be sold again. In the 18th century shoemaking was one of the most common trades; in London there were more than 800 shoemaking firms, a few employing more than 100 workers. And those of us employed in this trade would have started our work there as child apprentices.

    Shoe makers who produce shoes sold at $50 to $150 dominate the mass market today. Walk into any shop and you are offered many dozen of styles designed for all kinds of purposes available for your immediate purchase. What is presented to you on the shops’ shelves is the culmination of many capitalists’ ideas, investments, and efforts, i.e. their risk taking.

    There’s the tanner who took the risk of building a tannery and fitting it with equipment, formulating liquors to tan the hides, buying hair-on salted skins whose flaws will reveal themselves only after tanning. There’s the mechanically inclined capitalist who took the risk of inventing the machines used in tanning and shoe making, building a factory, and investing in the materials and machines to build these productivity enhancing devices. There are the logistic companies, capitalists themselves, who invested in fleets of trucks, ships, and aeroplanes (all made by other risk-taking capitalists) that moved all those materials and finished goods. And certainly all those factories built required a lot of capitalist builders taking risks. I think we have no appreciation for the risks taken by the many so that the things we need and want are available for immediate purchase.

    We are the beneficiaries of not only their talents but also of a system that rewards those who take the risk to share them. But make no mistake, it’s not a piece of cake to be risk taker. Don’t believe me? Look at the business failure rates of any sector. It boggles the mind why someone would accept the deal, but thank the heavens they do. “But… but… but… Facebook!” Yeah? How much have you paid Facebook to provide you a user directory of two billion people, a space where you may publish and broadcast your ideas, upload and store your photos and videos, call someone internationally, and reliably access all the services 24x7x365? Correct. You paid zero be a public persona, to attain an identity that was once reserved to the powerful and famous. And keep in mind, in the US 88 per cent of businesses have fewer than 20 employees and 99.7 per cent employ fewer than 500. Forty per cent of all enterprises have under $100k in revenue. Not only are the Mark Zuckerbergs, the Warren Buffets, and the Scrooge McDucks the extreme outliers, so too are the chairmen of the large corporations.

    To the best of my knowledge, Bill Gates never burgled my home nor took food off my table. My relationship with him is that I pay Microsoft a few hundred dollars for an operating system and office suite that allow me to be more productive and cease buying Liquid Paper. That millions of other people find value in that deal is not inequality. Profit is not plunder.

    The obsession with economic equality misses the larger and more important issue. Would you prefer to have an abundance of real choice (of shoes or anything else) at the $50, $500, and $5000 price levels with inequality or the empty shelves that characterised the economic systems devoted to equality? Why work for a wage when there’s little to buy? When you can’t even reliably find toilet paper, you gonna wipe your butthole with equality? Given a choice and accepting the respective systems warts and all, would you opt for the lower level of wealth inequality between you and Secretary General Leonid Brezhnev or the higher level of wealth inequality between you and Bill Gates?

    The way to reduce inequality is to do our best to ensure the viability of a dynamic system where innovative people are willing to take the risk, successful or not. Unsuccessful? Sure. Even when the venture fails, money was spent to establish it, outfit it, and employ people. And lessons were learnt that may aid the next entrepreneur. Our concern ought to be to establish measures to prevent too-big-to-fail situations like the financial collapse of ’08, which was abetted in part by government policies to reduce inequality (in home ownership and wealth). The government need not be in the business of giving guarantees to either people or companies. Quit stacking the deck.

    Once the geniuses figure out how to control the weather and do so reliably, then I’ll listen to their ideas about how to control human nature and the economy to bring forth the equal society. Until then…

    • AC Harper says

      I was struggling to remember the story ‘Harrison Bergeron’, thank-you.

      Similarly the mantra of ‘everyone shall win prizes’ rapidly results in the school sports day being cancelled because there are not enough prizes for everyone… grade drift results in everyone getting an ‘A’, and a number of children suddenly discover that the adult world is not so forgiving.

      Was that part of the ‘evil’, happening today, that you had in mind?

  14. I’m sorry, but before we go too far off defending inequity, can anyone give me a rundown of the supposed harms of inequity? I mean one that is slightly more concrete than the wide-eyed, apocalyptic doomsaying in the comments above?

    ‘The rich get richer while the poor get poorer’ is neither a moral defense of stealing, even from the rich, nor does it explain why a better state of the world would be the rich and the poor all get poorer (the usual outcome of massive redistribution schemes). And anyway, it doesn’t even describe the non-zero-sum real world where the rich get richer and the poor get richer.

    So, in a world where over the last half-century capitalism has created a massive global middle class, brought access to technology and global markets to the poorest corners of the world, and is alleviating the suffering of the world’s poorest people, can anyone tell me why anyone even gives a second thought to jeff bezos’ balance sheet?

  15. Have you ever considered an evolutionary biology approach to justifying inequality? Given that mammals are generally random assortments of genes intermingling to find what works and what doesn’t by “throwing everything at the wall” breed innate differences of capability? We are part nurture, more so than any other creature, but we have not completely escaped nature yet. Bret Weinstein has some great thoughts on interpretting inequality/markets through the lens of biology/game theory.

    Also, how about Steven Pinker’s empirical arguments in his book Enlightenment Now? He chooses to compare planned economies vs markets with little differences otherwise (North/South Korea, Venezuela vs Chile, Botswana vs Mugabe’s Zimbabwe). In addition, many of the Scandinavian examples, he points out, have homogeneous populations. A more socialist approach requires trust amongst the population that noone abuse the system, something that becomes a little more complicated with diverse and transient populations such as the United States.

    Nonetheless, great article. Loving Quillete so far: long form, well written articles about critical and sometimes uncomfortable subject. I like the fact that you are looking for the best arguments against your position

    • “Have you ever considered an evolutionary biology approach to justifying inequality?”

      Why would you want to justify inequality? Maybe evolutionary biology can explain some of the reasons why we have so much inequality.

      ” In addition, many of the Scandinavian examples, he points out, have homogeneous populations.”

      Lots of populations have a high degree of homogeneity, and most of them aren’t as prosperous as the Scandinavian countries. Sure, similiar genetics might be one of the reasons why Scandinavians trust each other, but there could be lots of other reasons why Scandinavian countries are so prosperous. You probably should investigate more about this.

  16. Jack B. Nimble says

    Oh good grief, there’s plenty of evolutionary genetic evidence for past human inequality in male reproductive success. For example, https://www.nature.com/articles/ejhg2014285 :

    ‘Abstract–High-frequency microsatellite haplotypes of the male-specific Y-chromosome can signal past episodes of high reproductive success of particular men and their patrilineal descendants. Previously, two examples of such successful Y-lineages have been described in Asia, both associated with Altaic-speaking pastoral nomadic societies, and putatively linked to dynasties descending, respectively, from Genghis Khan and Giocangga. Here we surveyed a total of 5321 Y-chromosomes from 127 Asian populations, including novel Y-SNP and microsatellite data on 461 Central Asian males, to ask whether additional lineage expansions could be identified. Based on the most frequent eight-microsatellite haplotypes, we objectively defined 11 descent clusters (DCs), each within a specific haplogroup, that represent likely past instances of high male reproductive success, including the two previously identified cases……….’

    What are the implications of this finding for human morality? Nothing at all:

    ‘….Social progress means a checking of the cosmic process at every step and the substitution for it of another, which may be called the ethical process; the end of which is not the survival of those who may happen to be the fittest, in respect of the whole of the conditions which obtain, but of those who are ethically the best…..’ Thomas Henry Huxley 1893. https://en.wikiquote.org/wiki/Thomas_Henry_Huxley.

    Also Google ‘Naturalistic Fallacy’ and ‘is versus ought’.

    • So, the regressive left is right in assuming that differences in IQ between ethnicities might be used to discriminate ethnicities with low IQ?

      This just makes me scared that people in general aren’t as clever as Sam Harris, and I am not completely sure how well he understands that.

  17. Mountain Man says

    Debates about equality reveal as much about moral biases as any inherent values.

    Liberals often champion economic equality, and are ready to use politics and violence to achieve their preferred outcomes.

    But let me propose another fundamental dimension with inherent inequality: sex. As a species we are born with highly variable sexual assets. And with a mix of nature and nurture, we tend to desire sex more with individuals that have desired assets. Of course, most of us do not get the quality of sex desired, based on our individual or even group judgements.

    Should we fix this? Should our social community identify those few with unfair high sexual attraction? Should we then ration out their sexual encounters? I suspect most of us, but especially liberals, would say no.

    • Try to stay 30 days without sex, then 30 days without food, and then tell me if you think these two dimensions are comparable.

      • Bartek says

        The fact, that we could not reasonably compare two things in the extreme tails of their respective distributions (like here, no sex vs. no food) does not mean, that the analogy is totally flawed and we could not make a comparison for the remaining 99% confidence intervals.

        When we speak of actual inequalities, especially in developed countries, the death of hunger is not the case. It is rather the other way around, poor people die prematurely because they eat _too much_. On the other hand, the total lack of sex, unlike the total lack of food, is an actual problem for some people (so-called involuntary celibate).

        So, sticking to normal, not theoretical extreme cases, can we compare the inequalities in sex distribution to inequalities in wealth distribution? Yes, we can.

        Voila!

        https://www.project-syndicate.org/commentary/couples-intimacy-how-much-sex-by-raj-persaud-and-adrian-furnham-2017-09?barrier=accesspaylog

        “The study found that the difference in wellbeing for people in relationships who engage in sex once per week, compared with those who have sex less than once per month, was greater than the difference in wellbeing for those earning $75,000 versus those making $25,000. In other words, having sex four times as much boosted participants’ moods as much as an additional $50,000 per year would do.”

        • “When we speak of actual inequalities, especially in developed countries, the death of hunger is not the case. It is rather the other way around, poor people die prematurely because they eat _too much_.”

          Do you have any evidence for this? I would strongly assume that poor people mostly die from health problems related to malnutrition and unclean drinking water.

          Also, I would be more interested in the difference in well-being between those that earn less than 2000$ a year, compared to those that earn $25 000 a year, since the greatest increase in well-being is for those that earn very little. And there are lots of people in the world that earn less than 2000$ a year. Probably more than half of the world population.

  18. Al says

    Nice strawman Zanthius, Mountain Man’s point above that people on the left are for forced redistribution of wealth yet would be against redistribution when it came to sexual activity is well made.

    Inequality of income and wealth is no different from inequality of other attributes amoung people, yet these are the only two attributes that seem to cause consistent conflict even though they are no more arbitrary than any other attributes, why is that? People should be outraged at diffeences in intelligence, behaviors, habits, geography, etc just as much, yet they aren’t, which means people are inconsistent and arguing in bad faith ultimately, since otherwise they would call for leveling down across the board for the sake of equality.

  19. Darren, Nottingham says

    Progress and Poverty (1879) explains today’s inequality much more precisely than Pikettey’s Capital (2010?).
    The inherited wealth Piketty is talking about – but fails to identify – is derived from land ownership. It was a once widely discussed phenomenon called the “unearned increment”.
    And the main issue is not income inequality but the windfall gains accruing to land owners.
    Why is this important? Because the solution becomes crystal clear – shift taxes from labour/wages and capital/profit onto land value.
    And there’s a bonus – such a tax system is economically efficient.

    • Chris says

      tax land? well, that only works if you live in the good part of town, where your lot actually has value. if you live elsewhere, you pay a lot of taxes that you cannot sell.
      sorry, but that is the unfortunate reality.
      the basic problem of taxation is not how to get the money, but to spend it wisely.
      but since every politician has to pay someone back once the managed to climb the grease pole, it is pretty clear where tax money is going to be spent

      • Darren, Nottingham says

        Chris. A tax system based on land values – the once famous Single Tax – forces govt to spend wisely. Think about it, if the govt’s only income is from land value then it’s one priority will be to raise land values by spending intelligently on services and infrastructure.

        Ref your first point – the situation is the reverse – if you live in central London you pay a lot of land value tax, if you live in central Detroit, you pay very little. The single tax* aligns with so many of the things we want.

        *the single tax = abolish all existing taxes (think about that) and replace with one flat rate land value tax.

  20. Chris says

    when we talk about inequality we need to stake the scope carefully. comparing statistics from vastly different economics is not providing anything meaningful to act upon.
    worse than this fruit-salad is however, thinking everyone plays to the same rules or has the same motivation when taking about financial equality. equalizing wealth is very desirable thing for the super elites!

    why do so many of the wealthy elites actively promote unchecked immigration (no skill, no language, completely different value structure, etc.)?

    well, simple: it takes away from the average person’s wealth in the first world and doesn’t contribute much to the vastly larger 3rd world population’s wealth.
    it has nothing to do with virtue; it it were they would just give $$$ away – none of them does. (okay, perhaps Bill Gates’ BMG foundation is decent in the sense that they will not see any $ back ever, most other foundations play a nasty double game to shelter taxes or bribe people / lobby their very own ultimately economical interests).
    in short, the more equal 99% get, the richer and more powerful the 1% will be – powerful way beyond what democracy can fix!
    clearly the fundamental problem with the neo-marxist idea and all it’s derivatives are that they will never be applied to the 1%; creating a very small super-power well beyond the long-gone days landlords – more like the privileged/untouchable communist party class and dictatorships

  21. Daniel says

    Rawls — and therefore, McManus — is too quick to dismiss meritocracy. Rawls’ identification of most meritous virtues as being “morally arbitrary” is problematic simply because he doesn’t define morality. Or if he does, it hasn’t been shared with the Quillette community yet. This is significant because the very things Rawls describes as morally arbitrary are actually not arbitrary at all. He has the temerity to describe work ethic as morally arbitrary. Work ethic!
    Person A slaves for 14+ hours a day, building his own house, raising his own crops — a self-made man.
    Person B works hard enough to put food on the table & pay rent, but at the end of the year, his net worth is 1/4 that of Person A.
    So Rawls would honestly say that Person A does not merit his net worth, simply because his parents taught him to work hard; he didn’t teach himself. Rawls, McManus: Person A, he himself, chose to continue working every hour of every day. Those choices cannot be morally arbitrary.Calling something like work ethic morally arbitrary is to invalidate the entirety of human enterprise.

    Rawls’ morally arbitrary argument tailspins into madness: consider Muhammad Yunus, the Bangladeshi banker and economist that started the microloans industry, and won the Nobel Peace Prize. He did so out of a desire to help poor people. Let’s grant Rawls his point that Yunus had no right to succeed just because he was educated, intelligent, and industrious (just for the sake of argument, mind.) Let’s grant that Yunus’ contribution to those areas was negligible, and he is an unthinking, unacting product of those external forces, without a shred of independence. However, the thing that sets Yunus apart, and has made him perhaps the most successful alleviator of poverty in the 20th & 21st centuries is his heart for poor people. This was behind his brilliant innovations in banking, and the success of the Grameen Bank. So Rawls would honestly say, with a straight face, that his desire to help poor people — such a driving motivation for him — was instilled in him by his parents, his family, and his society. He didn’t do it, so he doesn’t deserve any wealth he has accumulated — especially the $1M he won with his Nobel? Rawls whole point is nothing more than a reason to discredit the achievements of those wealthier than him. It is a wallow of bitter, soul-clogging envy. Who wants to be a spectator to that?

    At some point Rawls’ parade of nonsense comes up against the raised bridge of human choice. People make choices. Choices, by definition, are not morally arbitrary, and the moral responsibility for the choices rests on those who make them. If we can hold people accountable for immoral choices, we must recognize that they deserve to reap the benefits of moral choices.

  22. @Zanthius, thanks for sharing. The thesis that a dollar earned is logically equivalent to a dollar of indebtedness imposed on the rest of the world is a zero-sum model. Is there a non-zero-sum argument against inequity? On a personal note, I don’t doubt that your earnest consern is for the poor, as is mine.

    • @Nicholas Conrad

      If savings didn’t correspond to debt, money wouldn’t have any value.

  23. @Nicholas Conrad

    It should be possible to disentangle the zero sum component of the economy from the real growth component of the economy, which I presume is mostly about finding more efficient ways to produce things. However, a large part of the of the economy is a zero sum system, so the argument would still be true, although possibly to a somewhat lesser extent.

  24. Bill says

    On the Consequentialist Argument

    What happens when those inequalities produce outsized negative consequences for large parts of the population? At what point are the beneficial consequences not worth the cost of massive inequalities and externalities? What kind of distortions to the marketplace and democracy do these entail?

    On the Libertarian Argument

    Define coercion? Isn’t the state necessarily coercive? Doesn’t poverty dictate choices we would call coercive? Example, pay day lenders, discriminatory policing, etc. Don’t monopolies, oligopolies, captive markets, regulatory capture, fraud and corruption produce coercion? What does wealth owe to the larger society and the infrastructure and laws that provide stable markets and the opportunity to accumulate that wealth?

    Why is individual “freedom” the pre-eminent moral consideration? What happens to Justice, Fairness, Democracy and Order? Are they all second tier considerations? Can we abide a nearly unlimited individual freedom to accumulate wealth and a coercive state or regime in which only the most economically successful determine the choices and the outcomes? How is that any less coercive than the state without a highly regulated market and progressive system of taxation?

  25. cardiffkook says

    McManus,

    In your prior essay, you at least managed to frame the issues as what type of society would we like to belong to. This leads to questions on what types of rules and institutions we would choose impartially. Anyone thinking clearly would probably choose some version of liberal free market with safety net democracy like the US, Canada or Sweden. Millions of third world inhabitants actually are choosing with their feet. Thus your question answers itself.

    In this one, you shift to some strange mystical level of cosmic justification for why Jobs, Oprah, McCartney and Curry should make more than me or you. You need to first explain why they need to justify anything to us when they never harmed us in any possible way.

    How is it any of our business? Why do they need to justify anything to anyone? Do you need to justify to me why you get to sleep with your spouse every night and I never do? Does an unemployed person have to justify why they deserve more leisure time that a corporate executive working 60 hours a week? Does Ryan Rosling need to justify to me why he is so much better looking? Did he earn it?

    Go ahead I dare you. Please justify why they (or you in the case of your privileges with your spouse) need to justify anything.

    As for the rest of your essay, the data actually reveals that the rich are increasingly self made. Easy to google, please quit making stuff up.

    https://www.forbes.com/sites/afontevecchia/2014/10/03/there-are-more-self-made-billionaires-in-the-forbes-400-than-ever-before/#20fa7e33691e

    As for Piketty, his thesis is not accepted by actual economists (see the IGM survey on the topic) and reveals that inequality drops with recessions and catastrophic wars and is inversely correlated with actual global prosperity. Talk about inconvenient truths.

    On Hayek, he was clear that the category error is to confuse value added with merit. Not the same thing.

    But to summarize my objections to someone who had the temerity to demand justification for discrepancies in income:
    1) It is what a reasonable person in terms of rules and institutions would choose behind a veil and is what reasonable people are choosing as it optimizes median wealth, freedom and safety
    2) It does optimize societies wealth, which can be used to fund institutions and safety nets.
    3). If nobody is harmed in the process, what business is it to butt in?

    Sorry, but this OP is a mess.

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