Thursday, October 16, 2014


Simple justice dictates that economic prosperity turn on individual skill, foresight,industry and risk-taking — traits which vary across the broad spectrum of the human species like a bell-shaped curve. As British philosopher Samuel Johnson lectured, “So far is it from being true that men are naturally equal, that no two people can be half an hour together, but one shall acquire an evident superiority over the other.”

John Locke wrote in “The Second Treatise of Government” — virtual gospel to the Founding Fathers — that, “every man has a property in his own person. This nobody has any right to but himself. The labor of his body, and the work of his hands, we may say are properly his.” Locke added that men unite in a society “for the mutual preservation of their lives, liberties, and estates, which I call by the general name ‘property.’ “

Income commensurate with effort and accomplishments is morally just and socially advantageous. Industry, ambition, self-discipline and creativity should be encouraged by market rewards. Sloth, indolence and licentiousness should be discouraged by diminished income. We cannot prevent the sun from shining on the evil and good alike, but we can prevent the injustice of an equal sharing of income despite unequal efforts in the organization of government.

The Brook Farm experiment in Massachusetts discredits the equal income mantra regularly trumpeted today. (It is the subtext of Thomas Piketty’s “Capital in the Twenty-First Century”). The utopian community was founded in 1841. Members would work according to their abilities and share equally in the wealth. The experiment died six years later. It warred with human nature and a visceral sense of fairness.

Ralph Waldo Emerson refused several invitations because of his “conviction that the Community is not good for me.” He later observed, “The country members naturally were surprised to observe that one man ploughed all day and one looked out of a window all day and both received at night the same wages.” Henry David Thoreau disputed the idealism of utopian societies, and noted in his journal: “As for these communities, I think I had rather keep bachelor’s hall in hell than go to board in heaven.”

There is nothing facially disturbing about a mean income of $322,000 for the top 5 percent of households in 2013 compared with an $11,000 mean for the bottom quintile. Thomas Edison and Bill Gates by their industry, innovations and risk-taking created staggering wealth, income and consumer satisfaction for both themselves and for others. They became mega-wealthy not by extorting money from the unwilling, but by producing something for which consumers would willingly pay — a happy convergence of private greed and public good.

Income inequality in the United States has not given birth to government tilted in favor of the rich. Money does influence the outcome of elections, although the extent is indeterminate. (Nelson Rockefeller with all his wealth never became president). Money in politics became more influential after the United States Supreme Court granted it First Amendment protection in Citizens United. But look at the federal budget. Government is not a tool to enrich the wealthy.

Federal income transfer programs (excluding Social Security and Medicare), for example, cash benefits, health care, food, approximate $1 trillion annually, and the sum continues to climb. It is supplemented by $250 billion annually in state income transfer programs. If this spending were sent in the form of a check to every indigent household, each would enjoy a cash income of $44,000 per year according to Robert Rector of the Heritage Foundation. Further, Social Security and Medicare expenditures approximate $1.4 trillion annually.

In other words, an estimated 63 percent of federal spending is dedicated to income redistribution programs favoring the poor or underprivileged — hardly a manifestation of a plutocracy or the Ancient Regime in pre-revolutionary France.

It is true, however, that what is called crony capitalism exists in the form of corporate welfare for the makers of everything from fighter jets to windmills and electric cars. Defense contractors like Lockheed Martin or Boeing strategically locate their plants and employees in member districts to defend their weapons systems more as jobs programs for their constituents than as cornerstones of our security. That is not an argument in favor of income equality, though.

We are born unequal in aptitudes and endowments. We are born unequal in opportunities for success based on parental nurturing or resources. To that extent, life is unfair. Not all income inequality derives from differences in merit or ambition. However, we have no metric for distinguishing between merit-based inequality and fluke-based inequality, and targeting only the latter for elimination.

If we made the attempt, we would squander every day fixated and quarreling over equality with no time to create wealth to divide — a perfect equality of misery.

In sum, income inequality is the worst form of income distribution except for the alternative.

Bruce Fein is a former associate deputy attorney general and general counsel of the Federal Communications Commission under President Reagan. He is author of “American Empire Before the Fall and Constitutional Peril: The Life and Death Struggle for Our Constitution and Democracy (Palgrave Macmillan, 2009).

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