Below are my opening and closing statements from an Oxford-style debate hosted by the NYC Political Forum. My friend Roberto Guzman and I argued against the proposition and won. (Reading time 8 minutes.)
It is not economic inequality that is harmful to human well-being, but a misguided concern with economic inequality that is harmful to human well-being.
I’d like you to do a thought experiment. Consider two people. The first makes $50,000 per year. The second makes ten times as much, $500,000 per year. The inequality between their incomes is $500,000 minus $50,000, i.e., $450,000.
Now imagine that the first person’s income doubles, from $50,000 to $100,000 per year, and that the second person’s income also doubles, from $500,000 to $1,000,000 per year. In doubling their incomes, each individual is obviously better off than they were before. But now notice that we have also doubled the level of economic inequality between them, which has increased from $450,000 to $900,000.
By the standards of our opponents, the doubling of income is of no consequence, but the doubling of economic inequality is immoral and harmful. What then, on their premises, would be moral and beneficial? Cutting both incomes in half, thereby halving the level of economic inequality between them. But, of course, in reality, it would be immoral and harmful to cut their incomes in half.
So that’s point 1: Not only is there is no logical relationship between economic equality and human well-being, but it is possible to have an inverse relationship. Thus, you can either be concerned with the economic equality of the group or you can be concerned with the well-being of the individuals within it, but not both.
The reason for this is because each of us is a separate person, with his own life or death, health or sickness, happiness or unhappiness at stake. There is no good or bad for the group per se, because the group does not exist as an independent entity in reality, only the people within it do.
To make this point less abstract, consider yourself personally and whatever person happens to be sitting next to you.
If the person next to you suddenly became twice as wealthy, it would not make you twice as poor. Your own level of wealth would be exactly the same as before. Conversely, if the person sitting next to you suddenly became twice as poor, it would not make you twice as wealthy.
So that’s point 2: your neighbor’s level of wealth has no bearing whatsoever on your level of wealth.
Now let me ask you to consider a psychological point. Would you agree that it would be a psychologically unhealthy person that felt ill-will towards the person sitting next to them, were that person to become better off?
So that’s point 3: a concern with other people’s greater wealth is psychologically unhealthy.
Now, let’s consider the envious person in our previous example. Given his ill-will towards his neighbor based on his neighbor’s greater wealth, would he then have a right to take a gun to his neighbor and say: “give me your money until our wealth is equal?” Obviously, he has no right to rob his neighbor. But if that is so, then it would follow that his government would have no equivalent right to do the same on his behalf, since a proper government merely functions as an agent to protect the rights that we as individuals already possess.
So that’s point 4: we neither have a moral right to rob a wealthy neighbor, nor a political right to vote to have our government do the same on our behalf out of an alleged concern with economic inequality.
Now a further point.
In a free society, other people’s wealth and success benefit you. That is because a person becomes wealthy in a free society by trading with others. By definition, a trade only takes place when both parties perceive a benefit to themselves. Therefore, a person who becomes wealthy in a free society does so by creating products, services, or art that others value. Think of Steve Jobs, who created the personal computer and the iPhone, or Miles Davis who created several new styles of jazz, or Alexander Fleming who invented penicillin, as examples.
So that’s point 5: economic inequality in a free society is beneficial to everyone in that people become wealthy in such a society by creating values that benefit the people they trade with.
Finally, let’s consider the fact that the money required to create factories and pay wages comes entirely from the saving and investment of those who are able to produce more wealth than they consume, i.e., the wealthy. This capital then makes possible both the production and the purchasing of our clothes, our houses, our medical care, our cars and computers.
So that’s point 6: seizing the wealth of the wealthy due to a misguided concern with inequality is the equivalent of a farmer consuming his seed-corn. It brings a one-time, unrepeatable benefit at the cost of long-term impoverishment as a country’s capital becomes consumed rather than invested. Think of Cuba, North Korea, and Venezuela as examples. On the other hand, respecting the property rights of the wealth creators who save and invest their capital results in economic progress for the entire society. Think of the United States, Hong Kong and South Korea as examples.
Considering the preceding six points, it is not economic inequality that is harmful to human well-being, but a misguided concern with economic inequality that is harmful to human well-being.
The advocates of economic equality often frame the debate in terms of the difference between the 1% and 99% of income earners within the United States.
To make it into the top 1%, it is necessary to have an annual income of over $500,000. That means that anyone in the United States who makes less than half a million dollars is in the 99%.
Essentially, the difference between these two groups is the difference between someone who can go to the most expensive steakhouse in New York City to eat filet mignon, vs. another who buys it at Trader Joe’s and cooks it himself.
The 99% in this country have cars, computers, flat-screen TVs, smartphones, heating, air conditioning, all of which is made possible, by the way, by the saving and investment of those who are able to produce more than they consume, i.e., the 1%.
If one is concerned with inequality then, why would one arbitrarily limit the 1% vs. the 99% argument to within the borders of the United States, when most of the people in the world live outside those borders? Aren’t the people living in Europe, Asia, Africa and South America human beings too? So let’s consider economic inequality worldwide.
To make it into the top 1% worldwide is a much lower threshold, just $34,000 per person. That means that all of us in this room are part of the 1% in relation to everyone else. But of the 7 billion people alive in the world, 2 billion live on $1 or 2 a day, and fewer than 1 billion have anything near our level of wealth. In other words, most of these other people are impoverished in an absolute sense, or suffering and starving.
Now, do the advocates of economic equality choose to give up their cars, computers, flat-screen TVs, smartphones, heating, air conditioning in order to reduce the level of inequality between themselves and these others who are truly suffering? Of course not. Their concern is with alleviating the rich in this country of their wealth.
But it gets worse. Because in the 20th Century an ideology purported to create a society of economic equality, Socialism, was put into practice in Soviet Russia, Red China, and many other countries and cultures throughout the world. When put into practice, these ideas led to the death of at least 100 million people who were either murdered or deliberately starved to death by their own governments, and the impoverishment of everyone else.
Now, I would never, ever accuse either our opponents or anyone else in this room of advocating this kind of evil. My assumption is that those in this country who support the doctrine of economic equality do so out of pure naïveté. My assumption is that this support, for most Americans, goes no deeper than the thought, “wouldn’t it be nice if everyone was equally well-off.” However, you need to go quite a bit deeper than that when evaluating a philosophic idea. And now that we have, I hope you’ll join Rob and me in our advocacy of the only form of equality that matters for human well-being, which is the original American doctrine of equality of rights, including the rights to life, liberty, and the pursuit of happiness.