The Half Truth About Inequality


    Inequality is the new buzzword, especially since it’s often perceived as inherently unjust. Outraged about inequality of income, the self-described “occupiers” took to urban camping to berate the top 1 percent of income earners. In his State of the Union Address, President Obama trotted out Warren Buffett’s secretary to underscore the supposed injustice that the rich have more than enough money while not paying enough taxes.

    On one level, a certain concern with inequality is understandable in a nation like ours which is founded on the self-evident truth “that all men are created equal.”

    But this latest obsession with inequality is fundamentally counterproductive.

    America’s founders knew that, while human beings are equal in some key respects, they are not equal in every respect. People have equal natural rights, but they have unequal virtues, talents, and dispositions. As James Wilson concluded “there is, and it is fit for the great purposes of society that there should be, great inequality among men.” This inequality of talents does not denigrate the natural equality of rights. Where people are equal, it is just to treat them the same; by contrast, where they are different, it is unjust to treat them the same.

    The American ideal of equality does not therefore necessitate equal wealth or income.

    By virtue of our devotion to equal humanity, Americans are committed to ensuring that every person has access to at least the basic resources required to sustain life in his society: In the United States, this has come to include not only food, clothing, and shelter, but also free public education, legal representation in courts of law, emergency medical care, and other forms of basic welfare. But establishing such a baseline of dignity does not mean that the government bears sole responsibility for providing these essential resources. Government protects the public’s freedom, order, safety, and peace by meeting needs that require the use of force (for example, by defending against military threats, enforcing contracts, and upholding laws). While the state should maintain a minimum safety net, civil-society institutions like families, churches, and community groups are ultimately better equipped to fulfill mutual obligations and enable people to care for one another.

    Once crucial rights have been secured and the basic subsistence level of resources has been provided, the differences between individuals should be acknowledged and respected. This means that government has an obligation to protect people’s exercise of their differing abilities and also the unequal amounts of property they accumulate as a result of those talents. As James Madison argued in Federalist No. 10, “The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results.” Freedom, Madison understood, inevitably brings unequal income and wealth.

    To achieve strict economic equality, though, government would need to intervene in people’s private decisions to a degree that would make even some of the most ardent equalizers uncomfortable. Indeed,  government would need to regulate income creation and prevent some people from obtaining certain advantages over others (for instance benefits from attending private schools or from parents investing time and money). Where governments tried to enforce strict equality in the past, as in socialist and communist regimes throughout the 20th century, power became more concentrated in the hands of a few (government officials) while material equality and prosperity among the general population remained elusive.

    In addition to being widely unpopular, such interventions would also be exceedingly inefficient, because different people value different things (money, land, physical health, travel, consumer goods, comfort, and so forth) in different ways. Government bureaucrats necessarily lack the ability to know the relative degrees to which citizens value these goods.

    In a market economy underwritten by the rule of law, the gap between rich and poor is not itself the source of injustice. Of actual concern are the underlying factors that impede success, stifle opportunity, and foster unhealthy dependence on government. What requires redistribution is not our income but our moral attention. The sooner our economic debates move beyond the gap between rich and poor to questions of growth, mobility, and enduring prosperity, the sooner we will be able to nurture conditions that allow everyone the opportunity to rise and flourish.

    The full version of this essay appears in National Affairs (Winter 2012 edition).