Previously I wrote on the way in which the terms just, fair or equal are understood differently by liberals and conservatives. Nearly every discussion which contains any of these three words (just, fair or equal) is plagued by an assumption of the liberal (utopian) goal of equality of result being blurred with the conservative (tragic) incentives built into an equality of process. Here is one such online post:
I’m looking to have a grown-up discussion on income and wealth inequality in America.
I would prefer we refrain from liberal/conservative battles and talk about the following:
- Does income/net worth/Financial wealth inequality exist in America?
- What does Income mean vs Net Worth and Financial Wealth?
- What causes inequality if it exists?
- How do you fix inequality if it exists?
The answers to these four questions seem ridiculously obvious to those who hold the conservative tragic view. They hardly seem to be “grown-up” questions.
Of course income inequality exists. If I want to be a bad poet you can’t make me take a higher paying job in a cube farm. And if you and I both decide to be poets, one of us will sell more of our work.
Of course net worth and financial wealth inequality exists in America. Even if we were equally bad poets, you might decided to have a cell phone and I might save and invest the equivalent cost instead. I would defer consuming my earnings. The textbook definition of capital is “deferred consumption.” Over our working careers, my saving and investing would generate an extra $1 million dollars in my net worth. All this simply because I chose to go without a cell phone. Unless you want to confiscate my savings or force me to buy a cell phone there will be net worth inequality.
Most of the causes of income inequality in America stem from our culture. A culture of poverty encourages people within that culture to think a certain way. Usually that way of thinking is an external locus of control and a present hedonism time perspective. On the other hand, a culture of wealth and success has an internal locus of control and a future oriented time perspective. Or put another way, here is a quote from the movie, Margaret Thatcher:
“Watch your thoughts for they become words. Watch your words for they become actions. Watch your actions for they become… habits. Watch your habits, for they become your character. And watch your character, for it becomes your destiny! What we think we become.” – Margaret Thatcher.
The last question is perhaps the silliest: “How do you fix inequality if it exists?”
It is clear that the author is talking about inequality of result. And that is not a problem which requires a solution to “fix” it. And even if you tried to fix it, it would be impossible. If I refuse to work and you insist on abolishing inequality then there is no solution. None of these are just, fair or equal:
- If you work twice as hard and give me half of your productivity we have equality of results, but you worked twice as hard as you needed to and I did not work at all.
- If neither of us work we are both equally impoverished. But then we both starve to death.
Most work toward equality of results impoverishes everyone.