On Inequality

The latest poll-tested platitude being purveyed by the politicians is the notion of “income inequality,” a pernicious idea that only leads to harm. Consider: In 2010, Joe earned $50,000 and Bill earned $100,000, a gap of $50,000. The following year saw a boon for both: Joe and Bill both doubled their earnings, to $100,000 and $200,000 respectively. Great news for both, right? Not according to this theory, which saw the disparity in their incomes also double. They each might have earned more money – a lot more money – but they should presumably be unhappy because the income gap rose from $50,000 to $100,000. Are there people who really think this a bad thing? Yes; these are the politicians and their spinners trying to agitate the public to serve their own purposes.

Are normal people bothered by this? One would think not, but in fact studies have shown that most people would rather not have their earnings increased if it meant that their neighbors’ earnings increased even more. The problem then is not “income inequality,” but “character inequality.” People who let envy dictate their moods and happiness and begrudge the success of others will usually lead over-competitive and miserable lives, never able to enjoy their bounty, and only because someone has the same or more. That weakening of society’s moral fiber threatens more than opportunities for all to prosper; indeed, it threatens our ability to relate to each other properly and respect the rights of all.

The President and his PR advisors surely know this, but what has made “Income inequality” today’s buzzword is the sheer outrageousness of it. There has always been income inequality, and there will always be income inequality. Even if every person was a millionaire, there would still be people in the bottom 20% and the top 1% of earners. That is simple arithmetic. If we posit – as the liberals seem to – that the bottom 20% is almost always the victim of the top 1% (or top 10%) then there is no hope of ever moving forward because logic is then the greatest impediment to progress. There will always be a bottom 20% – in income, education, accomplishment, talent, etc., and there is no way to avoid that.

Thus, the “income inequality” gambit is a shameless plea for votes, and nothing else, by stirring up class warfare – by arousing the jealousy of the less fortunate (who are more numerous) against the more fortunate. But note the selectivity of the thinking: inequality troubles the Chief Executive only in one narrow area of life: industry and the professional class. That CEO’s, doctors, attorneys, bankers and similarly situated people out-earn (and by far) the average worker is held to be some sort of crime perpetrated by them against the masses. But those groups of people are also more educated and (generally) spent far many more years of their lives studying and preparing for their careers. They are also the ones who take risks, start businesses, build factories, manufacture products and invest their money in enterprises that will employ others. With risk comes the possibility of failure but also the possibility of great reward. Why should they be begrudged their successes when their counterparts who invest and lose money are not compensated for their losses? (Of course, some are –like the big banks that failed – and blame the politicians for that cozy relationship that uses taxpayer money to bail them out so – among other things – campaign donations could keep flowing).

But that is the only kind of inequality that troubles the President. Oprah far out-earns her competitors, as does Lebron James who out-earns the 12^th man on his team. Chicago Cubs fans suffer from championship inequality, certainly in comparison to Yankee fans. How shall that be rectified? The pay scale in Hollywood is wildly disparate, certainly between the lead actor and the “best boy” (I’m unclear what he does and I am afraid to ask.).

Life presents a series of inequalities: of intelligence, talent, opportunity and family stability. Across the world, there is a gross disparity in equality of freedom. These inequalities can be ameliorated but never fully eradicated. It is just life, in which we are placed in differing circumstances and forced to deal with a variety of challenges. Poverty is a challenge for some, and, frankly, wealth is a challenge for others. Indeed, wealth may be the greater challenge, if our guide is the young Hollywood star – there are a few such wretches every year – who comes into wealth early and self-destructs before our eyes but to the delight of the celebrity media.

The idea that taxing the wealthy more will improve the financial situation of the poor has been tried, tested and failed repeatedly. The war on poverty has spent trillions in fifty years with no appreciable impact on the poor; the percentage of poor people –but poor, not just relative poor – remains the same.  And why would we think it should? Poverty is here to stay. “For the destitute shall never cease from the midst of the land; therefore I command you that you shall surely open your hand to your brother the poor and to the destitute in your land” (Devarim 15:11).

In a healthy society, the existence of different classes is a phenomenon that binds people together, that enables each group to interact and make its unique contribution, and allows the wealthier to share their G-d-given bounty with the less fortunate. Taxation is not charity, and government is not an instrumentality of charity. Taxation is coercive, and therefore tax avoidance (not evasion, of course) is part of the American system; charity is voluntary and therefore ennobles the giver, as well reminds him of the simple justice involved in helping the needy. When government tried to displace the individual of the dispenser of charity, it not only does it more inefficiently but it also deprives the donor of the opportunity to refine his character.

None of this wins votes. What win votes are the promises to take money from Bill (by one mechanism or another) and give it to Joe. That is why the true solution to the income gap – due to the diminished opportunities available to some – lies within our reach but is unlikely to be embraced or even widely discussed outside a small circle of interested people. The problem is not the dearth of money for some but the dearth of values for too many.

It is well known that the greatest indicators of financial success in life are completing school (even just high school), getting married, and having children after marriage, not before. One can extrapolate from this and readily perceive the causes of poverty in American life: the poor are generally those who fail to finish high school, have children before they are married, and who even fail to marry or marry repeatedly. Those who stay in school and stay married are rarely poor, and usually their strained economic circumstances are the result of some trauma or untoward event.

There was a time when married couples received tax advantages in recognition of the government’s interest in encouraging stable homes. Although it still exists in modified form, there are other inducements to the anti-social behavior that produces or prolongs poverty. Children born out of wedlock to unmarried women are generally subsidized by the government – their births, their health care, their education, even their food. There is little incentive for a male breadwinner to stay behind, and so they don’t. Lingering poverty almost directly correlates to the epidemic of out-of-wedlock births, but it is considered uncouth and offensive even to use the term “out-of-wedlock,” as if there is some benefit to births that occur within a marriage as opposed to outside a marriage. News flash: there is a benefit, both moral and financial.

And couples who marry and stay married are more successful financially than those who do not. While we cannot impose love on those who do not love each other, we can encourage people to think long and hard before marrying and divorcing, especially if they have children together. Some communities have more of a safety net than others, but children – and the single parent who raises them – do tend to wind up on the bottom rungs of the economic ladder.

It is easier just to raise taxes on the rich. It sounds like the problem will soon be solved, but only fools believe that money is somehow conveyed to the poor. The poor are useful to the politicians for their votes, and the rich as the cudgels by which those votes will be extracted from the poor. But a true leader would not play the envy game. Instead, he would lead a campaign – not just give a speech – to revive traditional values in American life – of education, family, faith, stability, hard work, industriousness, and contentment with one’s lot in life. The true leader would also encourage many wealthy people to lose their obsession with material acquisitions, and certainly not to define their moral worth by their assets. In fact, what they give to others is a greater indication of their moral standing than what they spend on themselves.

Within a short time, “income inequality” will occupy no one’s time or thought. But because that canard has legs and votes, this approach is easier said than done. The effort alone would transform society in untold positive ways.