Income equality is shaping up to be one of the key issues in the 2016 presidential race, but is promoting equality the solution to reinvigorating the nation?
“What we care about is whether individuals are able to rise by merit—and the fact is that many of the policies the inequality critics say will improve mobility actually make rising by merit much harder,” they argue in the book.
"Chicago Tonight" host Brandis Friedman talked to Brook, executive director of the Ayn Rand Institute and former columnist for Forbes, about his case against equality, what the government should focus its economic policy on and how income inequality is being addressed in the presidential election.
“We are unequal. That’s just a fact of nature, a fact of reality. Inequality is metaphysical. We’re born with different talents, different abilities, we make different choices in our life that guide us in different directions,” Brook said. “We have different parents, different environments ... All of that plays into being different, and therefore, we produce different amounts. We choose different professions that might earn us more, earn us less.”
Brook said entrepreneurs like Bill Gates make more money because they produce something we consider incredibly valuable.
“The only way to make money in a free economy is to provide a service or a good that people really, really value and that promotes their own life. Otherwise, they wouldn’t buy it,” Brook said.
He argues that it’s up to individuals to decide to take advantage of a free economy.
“We have to place the responsibility with [individuals],” Brook said. “But then we need to create an environment that makes it possible for them to have opportunities and for them to take advantage of those opportunities.”
Read an excerpt from “Equal is Unfair: America's Misguided Fight Against Income Inequality” below.
From Chapter 1:
If we agree with the opponents of economic inequality about anything, it’s that today’s status quo is unacceptable. There are genuine barriers to opportunity, and the deck is becoming stacked against us—but not because “the rich” are too rich and the government is doing too little to fight economic inequality. The real threat to opportunity in America is increasing political inequality.
In a land of opportunity, an individual should succeed or fail on the basis of merit, not political privilege. You deserve what you earn—no more, no less. Today, however, some people are being stopped from rising on the basis of merit, and others are achieving unearned success through political privilege. As we’ll catalog in the pages ahead, the source of this problem is that we have granted the government an incredible amount of arbitrary power: to intervene in our affairs, to pick winners and losers, to put roadblocks in the way of success, to hand out wealth and other special favors to whatever pressure group can present itself as the face of “the public good.” Some of these injustices do increase economic inequality, but it isn’t the inequality that should bother us—it’s the injustice.
When a bank or auto company that made irrational decisions gets bailed out at public expense, that is an outrage. But the root of the problem isn’t their executives’ ability to influence Washington—it’s Washington’s power to dispense bailouts. When an inner-city child is stuck in a school that doesn’t educate him, that is a tragedy. But the problem isn’t that other children get a better education—it’s that the government has created an educational system that often doesn’t educate, and that makes it virtually impossible for anyone but the affluent to seek out alternatives.
Of course people will try to influence a government that has so much arbitrary power over their lives, and of course those with the best connections and deepest pockets will often be the most successful at influencing it. The question is, what created this situation, and what should we do about that? The critics of inequality tell us that the problem is not how much arbitrary power the government has, but whom the government uses that power for. They say that by handing the government even more power, and demanding that it use that power for the sake of “the 99 percent” rather than “the 1 percent,” everyone will be better off. We believe that only when the government is limited to the function of protecting our equal rights can people rise through merit rather than government-granted privilege, and that the cure for people seeking special favors from the government is to create a government that has no special favors to grant.
But as important as it is to identify what’s wrong with America today, we also need to identify what’s right with America today. Whatever our problems, we still have a substantial amount of freedom and we’re still using that freedom to improve the world around us. Modern life, as a result, is amazing. We’re living longer, healthier, richer lives than at any time in history. We have more ways than ever to learn, travel, create, and communicate. And more and more people are gaining access to this amazing world: among poor Americans today, nearly 75 percent have at least one vehicle, 50 percent have cell phones, two-thirds have cable or satellite TV, half have at least one personal computer, and 43 percent have access to the Internet. And for anyone who wants to make something of his life, there are still abundant economic opportunities available. The Internet alone has dramatically lowered the barriers to gaining new knowledge and skills, to finding work, and to launching new business ventures.
None of this is to deny the real struggles millions of Americans face, or to suggest that we can’t do better. On the contrary, the reason it’s vital to talk about these achievements is so we can learn what made them possible and put those lessons to work. But all too often the critics of economic inequality don’t want to talk about these achievements, because, as we’ll see, the forces that have made modern life possible go hand in hand with enormous economic inequality. Only when people are free to act without arbitrary interference by the government and to amass great fortunes do we get an innovative, prosperous, opportunity-rich society. Silicon Valley wasn’t built by paupers and ascetics.
Equal Is UNfair: America’s Misguided Fight Against Income Inequality, by Don Watkins and Yaron Brook. Published by St. Martin’s Press. ©2016
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