I have occasionally wondered about the inequality of income in society problem. In my view, it is seldom a problem at all, but it is easy for people to see the outcome and not the substantive difference in effort and skill required to achieve the outcomes.
George Will wrote an interesting piece recently. The Causes of Income Inequality. His points are:
- The fundamental producer of income inequality is freedom. Individuals have different aptitudes and attitudes. Not even universal free public education, even were it is well done, could equalize the ability of individuals to add value to the economy.
- In an open society, rewards are set not by political power but by impersonal market forces
- Big, regulatory government inherently exacerbates inequality because it inevitably serves the strong.
- Seven years of zero interest-rate policy has not restored the economic dynamism essential for social mobility but have had the intended effect of driving liquidity into equities in search of high yields, thereby enriching the 10 per cent of Americans who own approximately 80 per cent of the directly owned stocks.
- By making big government inexpensive, low interest rates exacerbate the political class’s perennial disposition toward deficit spending. And little of the 2016 federal budget’s $283 billion for debt service will flow to individuals earning less than the median income.
- Family disintegration cripples the primary transmitter of social capital — the habits, mores, customs and dispositions necessary for seizing opportunities. The consequences for the life chances, and lifetime earnings, of millions of children are enormous.
- Bernie Sanders is doing well, if not good, by reducing the debate about equality to resentment of large fortunes. He should read Harry G. Frankfurt’s new book, On Inequality. It is so short (89 pages) that even a peripatetic candidate can read it, and so lucid that he cannot miss its inconvenient point: “It is misguided to endorse economic egalitarianism as an authentic moral ideal.”
- Frankfurt argues that economic inequality is not inherently morally objectionable. “To the extent that it is truly undesirable, it is on account of its almost irresistible tendency to generate unacceptable inequalities of other kinds.” These can include access to elite education, political influence and other nontrivial matters. Frankfurt’s alternative to economic egalitarianism is the “doctrine of sufficiency,” which is that the moral imperative should be that everyone have enough.
- The pursuit of increased economic equality might, but need not, serve the ethic of sufficiency. And this pursuit might distract people from understanding, and finding satisfaction with, “what is needed for the kind of life a person would most sensibly and appropriately seek.” This has nothing to do with “the quantity of money that other people happen to have.” Frankfurt argues that “doing worse than others does not entail doing badly.” And an obsession with others’ resources “contributes to the moral disorientation and shallowness of our time.”
- Sanders focuses less on empathy for the poor than on stoking the discontent of those who are comfortable but envious. They will ultimately be discomfited by the fact that envy is the only one of the seven deadly sins that does not give the sinner even momentary pleasure.
Damn, but it is hard to precis a George Will piece. Read the whole thing. This is but a shadow of the article.
Take the “doctrine of sufficiency” idea and apply to your plans. Having enough is the goal.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.