Equality Versus Liberty
One percent owns 35 percent! So what?
John Stossel | January 8,
2014
President
Barack Obama says income inequality is "dangerous ... the defining
challenge of our time." The pope is upset that capitalism causes
inequality. Progressives, facing the failures of Obamacare, are eager to change
the subject to America's "wealth gap."
It's
true that today, the richest one percent of Americans own a third of America's
wealth. One percent owns 35 percent!
But I
say, so what? Progressives in the media claim that the rich get richer at the
expense of the poor.
But
that's a lie.
Hollywood
sells the greedy-evil-capitalists-cheat-the-poor message with movies like
Martin Scorsese's new film, "The Wolf of Wall Street," which portrays
stock sellers as sex-crazed criminals. Years before, Oliver Stone's "Wall
Street" created a creepy financier, Gordon Gekko, played by Michael
Douglas, who smugly gloated, "It's a zero-sum game. Somebody wins;
somebody loses."
This
is how the left sees the market: a zero-sum game. If someone makes money, he
took it from everyone else. The more the rich have, the less others have. It's
as if the economy is a pie that's already on the table, waiting to be carved.
The bigger the piece the rich take, the less that's left for everyone else. The
economy is just a fight over who gets how much.
But
this is absurd. Bill Gates took a huge slice of pie, but he didn't take it from
me. By starting Microsoft, he baked millions of new pies. He made the rest of
the world richer, too. Entrepreneurs create things.
Over
the past few decades, the difference in wealth between the rich and poor has
grown. This makes people uncomfortable. But why is it a problem if the poor
didn't get poorer?
Progressives
claim they did. Some cite government data that show middle class incomes
remaining relatively stagnant. But this data is misleading, too. It leaves out
all government handouts, like rent subsidies and food stamps. It leaves out
benefits like company-funded health insurance and pensions, which make up
increasing portions of people's pay.
And
it leaves out the innovation that makes life better for both the rich and poor.
Even poor people today have access to cars, food, health care, entertainment
and technology that rich people lusted for a few decades ago. Ninety percent of
Americans living "below the poverty line" have smart phones, cable TV
and cars. Seventy percent own two cars.
But
hold on, says the left. Even if the poor reap some benefits from capitalism,
it's just not "fair" that rich people have so much more. I suppose
this is true. But what exactly is "fair"?
Is it
fair that models are so good-looking? Why is it fair that some men are so much
bigger than I, so no one will pay me to play pro sports? It's hardly fair that
I was born in America, a country that offers me far greater opportunities than
most other countries would. We Americans should be thankful that life is not fair!
Freedom
isn't fair, if fair means equal. When people are free, some will be more
successful than others. Some people are smarter or just luckier. Globalization
and free-market capitalism multiply the effect of smarts and luck, allowing
some people to get much richer than others. So what? Inequality may seem
unfair, but the alternative—government-forced equality—is worse. It leaves
everyone poor.
Opportunity
is much more important than equality, and there is still income mobility in
America. People born poor don't necessarily stay poor.
Pew
research shows 58 percent of the kids born to the poorest fifth of families
rose to a higher income group. Six percent rose all the way from the bottom
fifth to the top fifth.
Sixty-one
percent of kids born to the richest fifth of families fell from that group, and
9 percent fell all the way to the bottom.
Opportunity
requires allowing people to take risks and make changes. We won't always like
the outcomes. But over the long haul, we're still better off if people are free
to strive and fail, or maybe—reap big rewards.
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