The Inequality Obsession

Continuing my discussion of George Kennan’s book (see previous post), he also addressed inequality.  So have I (here, here, and here; maybe thus my own obsession). And we recently viewed ex-Labor Secretary Robert Reich’s film, Inequality For All. See how open-minded I am? It’s actually a good film and I’m in sympathy with much of it. I’ll discuss it in a separate post.

George Kennan said nothing has been more “totally disproved by actual experience than the assumption that if a few people could be prevented from living well everyone would live better.” This derived from his observing (as a diplomat) communist countries, where eliminating the rich was accompanied by impoverishing the rest. Yet that poverty was, for most people, made endurable by its being widely shared. And, after communism’s collapse, anyone’s effort to better their situation through enterprise was widely resented and opposed, as illegitimate.

I was reminded of the old Russian tale of the peasant granted one wish – with the proviso that whatever he got, his neighbor would get double. After long thought, the peasant says: “Take out one eye!” That psychology is relevant to the inequality obsession.

Is it unjust for one person to have more than another? Some seem to think so, or at least talk that way. But if the concept of justice means anything, it means outcomes earned and deserved, rather than meted out arbitrarily – and pure egalitarianism would entail the latter rather than the former. I recognize that there’s inevitably some element of luck in outcomes; but egalitarian obsessives seem unwilling to recognize an element of deservingness; that a person who works harder and/or smarter and lives more prudently should be richer.

In fact, there’s a widespread idea (here’s an example) that wealth and deservingness are inversely correlated – that not only don’t the rich deserve what they have, it’s actually the fruit of evil. All the more reason to see redistribution as social justice.

However, while of course a few people are thieves, most rich folks get their money through making a societal contribution of one sort or another.

When you buy a yogurt at the grocery, you’re not ripped off; you’re getting something worth more to you than the price paid (or else you wouldn’t buy it). The grocer, and the yogurt maker (and everyone else involved, e.g., in transporting it), who give you this boon, profit justly. That’s the reality of most economic transactions and relations.
We recently saw a TV documentary showing all that goes into manufacturing a certain monster truck. So many people working with such skill and attention to detail, to make sure that truck will do its job safely and well. It was really impressive. If they earn good pay, and their company earns good profits, they deserve it. This is the true face of business. It’s why all the rantings about the “evils of capitalism,” and the idea that wealth is obtained at the expense of the poor or society, miss the mark. The businesses you get yogurt from don’t profit at your expense, but by satisfying your needs and wants. Same for the truck manufacturer.

Inequality is rising not because more people are becoming poor, but because more are becoming rich; in particular, more very rich. That’s not a problem as long as everyone has a decent living standard. This we can achieve without exterminating great wealth. Indeed, the wealthy pay a disproportionate share of taxes that fund the social safety net.

Yet the obsession over inequality is not mainly a concern for the welfare of the poor. It is instead all about the rich. Lefties cannot stand it that they, with all their social consciousness and moral virtue, have less wealth, and consequently less power and influence, than benighted toads who (they think) are ethically inferior and get rich through grubby commerce.

To quote Kennan: “one cannot evade the occasional suspicion that it is not such much sympathy for the underdog that inspires much of this critical enthusiasm as a desire to tear down those who preempt the pinnacles of status to which they themselves aspire.”

(To be continued)