by Barry A. Liebling
In the classic novel Gulliver’s Travels there are two factions of Lilliputians who are divided by a bitter political quarrel. One side, the Big-Endians, insist that boiled eggs should be broken at the big end. Their adversaries are the Little-Endians who are convinced that the only proper way to open a cooked egg is at the little end. Gulliver, appropriately, recognizes that the contest is not about anything that should matter and has little sympathy for either side. Once he sees that the core premise (how an egg is opened is a vital political topic) is not valid he does not waste time getting into the minutia of the Big-Endian or Little-Endian arguments.
To the modern reader the lesson of Jonathan Swift’s egg satire is profound. Sometimes members of the “intellectual elite” (politicians, academics, journalists, entertainers, …) will proclaim that their pet issue is vital to the survival and prosperity of society. But proclamations, especially when they are based on demagoguery and emotion rather than rationality, are often wrong headed.
As of this writing Thomas Piketty’s best-selling book Capitalism in the Twenty-First Century has captured the attention of pundits of all stripes. The author, a professor of economics in France, presents a lengthy historical and statistical analysis of capital accumulation, economic growth, and wealth inequality in several European countries as well as in the United States. His big take-away is that capital accumulation is bound to grow faster than economic growth. And unless something is done (strong government intervention) the rich will inevitably become more prosperous and the degree of wealth inequality will be more pronounced. Increased inequality is likely to lead to social upheaval and instability. The culprit responsible for what Dr Piketty sees as a looming disaster is free market capitalism and the antidote is worldwide confiscatory taxes – especially on those with the most wealth.
As you would expect, the professor’s book has garnered lavish praise from progressives, leftists, and Democratic thought leaders. The bottom line is that it offers an “academic justification” for their core ambitions – to increase the scope and size of government, to collect more taxes (from those they despise), to give prizes to those they favor, and to discredit free market capitalism.
Leftist progressives are elated that their world view is getting support from the scholarship of a well-respected (by leftist progressives) economist. The book is enhancing their confidence and energizing their resolve in a similar way that A Theory of Justice by John Rawls did in the 1970s.
And – as anticipated – the counter-response from free market advocates, rightists, conservatives, and Republicans has been adversarial. Unfortunately, most of the critiques have focused on Dr Piketty’s data collection, analysis, and interpretation rather than going to the heart of the matter. For example, negative reviews have asserted that the book’s source materials are not reliable, that his discussion of wealth accumulation in the United States does not take into account how the tax code has changed and will continue to change, or that future innovation will attenuate inequality and benefit citizens at all economic levels.
What is the heart of the matter? The relevance of Dr Piketty’s work rests on two flawed premises about inequality of wealth: It is an intrinsic moral problem, and – if not checked – inequality will inflame social unrest.
When you examine the moral issue you can see that it is based on the fallacious assumptions of collectivism. To a collectivist the individual who creates wealth does not count. The group, the country, society, the entire world is the legitimate owner of everything and it is the duty of each individual to serve the collective. Anyone who has more than an equal share is suspect and has to justify why he should be allowed to keep more than his neighbor. Of course, leftists do not advocate absolute equality. Some people will always be better off than others. But the progressive idea is that the ruling elite has the right to “redistribute” from those who do not “really deserve” what they have to those that progressives favor. Permitting free men and women to trade by mutual consent is abhorrent to the leftist psyche.
Notice that since there is always some inequality, the committed leftist has a perpetual excuse for bossing other people around under the pretense of “reducing inequality.”
In fact, if you understand that all human beings should have sovereignty to their lives and have a right to pursue their own happiness through productive achievement the “problem” of wealth inequality evaporates. The essential moral issue is how men and women acquire wealth. If they accumulate their wealth honestly, without violating anyone’s rights they are entitled to all of it – even if they have more than their peers. Conversely, scoundrels who acquires wealth through force or fraud deserve none of it – even if they take from someone who has much more.
Once you see that the premise “inequality-is-bad” is not valid you do not have to scrutinize Dr Piketty’s long book to evaluate his thesis. Even if he is correct that wealth inequality will increase in a capitalist economy there is no compelling reason – aside from jealousy – to be concerned. The details of Dr Piketty’s research are as consequential to me as the Big-Endians’ rationale was to Gulliver. As long as I am free to pursue my interests I am not at all bothered that the most successful people are billionaires or even trillionaires. If they achieved their wealth properly by hyper productivity they almost certainly enriched many other people – including me.
But what about social upheaval? When some people have much more than others will citizens be inflamed to riot and attack the most affluent? People have free will and the ability to think. They are capable of acting properly or becoming part of a mindless mob.
It is significant that the progressive prediction that wealth inequality will lead to turmoil is not merely an opinion. It is a prophesy that leftists actively attempt to bring about. The educational establishment – from pre-school through graduate school – is dominated by ideologues who preach that capitalism and wealth inequality is evil. They do their best to encourage class warfare and stoke seething envy towards the most successful. The perpetual refrain of committed leftists is that unless the government “evens things out” ordinary people will (leftists hope) be bitter and angry.
Of course, the progressives do not have a monopoly on the political discourse. While still small in numbers, there are writers and speakers who are explaining the virtues of individual liberty. Their impact can blunt and eventually reverse the harm done by Dr Piketty and his accomplices. If you understand what is right about freedom and wrong with coercion you will reject Piketty’s premises.
*** See other entries at AlertMindPublishing.com in “Monthly Columns.” ***