Celebrating Income Inequality

22 08 2007

Alex Epstein in Capitalism Magazine

Criticisms of income inequality are always couched in a certain type of language. For example, it is claimed that wealthier Americans “command” an “unfair share” of our “national wealth.” Such language implies that American wealth is a communal pie that belongs equally to all of us.

But it is no such thing.

The vast wealth that exists in America has been created–through the productive activities and voluntary arrangements of individuals. And individuals do not necessarily create the same amount of wealth. Compare the value brought into existence by the entrepreneur whose productivity software is eagerly bought by millions–and the checkout clerk at a store that sells it. Such vast differences in productivity–which can be caused by vast differences in ability, work ethic, interests, skills, and choices–are the root of vast differences in income.

Because all wealth is created, it rightly belongs to those who earn it (or their chosen beneficiaries)–and no one can rightly claim to deserve wealth earned by others. If someone wants to make more money, he is free to enter a new field, gain new knowledge, start a business, or do anything else to enable himself to create more value.

More here.

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