Equal Rights vs. Egalitarianism

Peter Schwartz of the Ayn Rand Institute has written a powerful Op-Ed on the issue of egalitarianism. In it he argues that income inequality is something good -- a position almost never argued for elsewhere. As Schwartz notes, the issue of egalitarianism is not the issue of poverty. Wanting to alleviate poverty is one thing, but wanting to equalize everyone's wealth is quite another. And assuming that in order to do the former one must do the latter indicates a misunderstanding of economic reality, as such people are usually operating with an at least implicit premise that the world is a zero-sum game: for poor people to be better off, then rich people must be made worse off. Only by reducing income or wealth inequality -- by redistributing from the haves to the have-nots -- can the poor be made better off. But this is incorrect, as all boats can rise at the same time -- with some rising faster than others, either in percentage-increase terms or real-terms, or both. I'll now quote at some length from Schwartz, as he makes several points very well:

... the alleged problem is not that some are becoming poor--but that others are too rich. The complaint is that while the bottom tier enjoyed a 4% rise in income, the top tier enjoyed a 34% increase. The complaint is that over the past 25 years, the share of income of the top fifth of households climbed from 42% to 50%, while that of the bottom fifth fell from 7% to 5%.

But this development represents an injustice only if we use a perverse standard of evaluation. It is unjust only if we measure someone's economic status not by what he has, but by what others have--i.e., only if he benefits not by making more money, but by making his neighbor have less.

...

Egalitarianism is the antithesis of the valid tenet of political equality, under which we have equal rights. That is, we have the right to achieve whatever our ambition and talents allow, with no one permitted to forcibly stop us. Egalitarianism, however, is a denial of the individual's right to be left free. It is an abhorrent demand that some people be punished for achieving what others haven't. It is a brazen declaration that an equality of condition must be attained.

And how is it to be attained? By--as the Australians aptly phrase it--cutting down the tall poppies. No one is to be allowed to surpass his fellow-citizen. No one is to be allowed to rise. Which means that the most able must be brought down to the level of the least able. The equal spread of misery and privation is the only "equality" that egalitarians ultimately seek. This is why they extol socialist societies, where all suffer equal destitution, while vilifying capitalist societies, where all are free to advance according to their abilities and where the poorest enjoy greater luxuries than any citizen in a "worker's paradise."

Making others fall does not make you rise. While prohibiting a Thomas Edison or a Bill Gates from becoming fabulously wealthy does indeed reduce income inequality, it does not make the poor richer. Nonetheless, it is what egalitarians desire. Nonetheless, it is what egalitarians desire. They are motivated by what Ayn Rand called "hatred of the good": if they lack something of value, they want to make sure nobody else has it either.

Income inequality is an effect. The cause is the difference in people's economic production. Criticizing income inequality is like complaining that a computer carries a higher price than a paper clip. Price reflects an object's market value--and the money someone earns reflects the market value of his work. There is no fixed, pre-existing glob of income that somehow oozes disproportionately into the pockets of the rich. Wealth is created. The top fifth of the population have ten times more income than the bottom fifth because they have produced ten times more.

In a statist system, people advance through government favors and at the expense of the genuinely deserving. But in a free, capitalist system, income inequality represents something good. It means that exceptional individuals are free to do their productive best, and to reap their rewards. Whenever a Bill Gates arises to make his fortune, the income disparity between top and bottom increases--but so does everyone's standard of living. If so, why shouldn't we welcome an inequality--including a widening inequality--in incomes? And, instead of apologizing for this phenomenon, why aren't our leaders denouncing the egalitarian enviers who want to level us all?

The key distinctions here are between equality of rights vs. equality of end results, cause and effect, wealth as created and produced, rather than distributed from a fixed amount.

And lastly, I'll note that the argument here is being made based on principles, so the fact that some people inherit wealth rather than produce it is not relevant. The wealth was originally produced by someone, who then had as his or her right the opportunity to distribute that wealth as they saw fit (e.g., to their children, to friends, to charity, or whatever). And keep in mind also that what is being talked about is a free, capitalist society. What we have in the US and other semi-capitalist countries today are not free, capitalist societies. So that is why it is easy to think of people who, like those in statist nations, achieve great wealth "through government favors and at the expense of the genuinely deserving." But these, like those who achieve wealth through fraud or other criminal acts, are not counter-examples to the principles stated above.