The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Nearly every U.S. presidential candidate regards Òincome inequalityÓ as a crisis. The solution, we are told, is more government intervention: spend more on education and health care, and pass minimum-wage increases. But all of this outcry is based on a false premise Ð that income inequality is bad. While some of the problems critics point to are legitimate concerns, income inequality is not. Income inequality is a natural and desirable part of a free, prosperous society. Criticisms of income inequality are always couched in a certain type of language. It is claimed that wealthier Americans ÒcommandÓ an Òunfair shareÓ of Ònational wealth.Ó Such language implies that wealth is a communal pie that belongs equally to all of us. But it is no such thing. The vast wealth that exists in America has been created through the activities and voluntary arrangements of individuals. And individuals do not necessarily create the same amount of wealth. Compare the value brought into existence by the entrepreneur whose software is eagerly bought by millions Ð and the checkout clerk at a store that sells it. Such vast differences in productivity Ð which can be caused by differences in ability, work ethic, skills, and choices Ð are the root of vast differences in income. Because all wealth is created, it belongs to those who earn it Ð and no one can rightly claim to deserve wealth earned by others. If someone wants to make more money, he is free to enter a new field, start a business, or do anything else to enable himself to create more value. It is often implied that the rich get richer at the expense of everyone else. But the exact opposite is true. Since wealth is created, there is no limit to how much can exist. Further, the wealth creation of the richest people makes us far more productive and well-off. Consider how the wealthiest individuals in any free economy, businessmen, make their money. Businessmen profit when they bring out valuable products at desirable prices; thus, they are continually making better and cheaper products for everyone. And since businessmen profit when they make others more productive, they are continually seeking to create jobs that can add to their bottom line. We should recognize the moral right of each individual to enjoy whatever he produces Ð and recognize that none of us has a right to something for nothing.
