by Brian Balfour
Senior Vice President of Research, John Locke Foundation
Economic equality is an unattainable goal – and that’s the point.
For ages, progressives have insisted that economic inequality is perhaps the gravest societal injustice of our time. Whether blaming “capitalism” in the classical Marxian tradition, or the more recent neo-Marxist scapegoat of “systemic racism,” Leftists pound a steady drumbeat demanding sweeping economic reforms under the guise of addressing inequality.
Their open-ended mandate of economic equality, however, cannot be achieved, and they know it. The unreachability is a feature, not a bug, of their demand. Why? Because it provides a never-ending justification for ever-increasing government intervention into the economy and greater centralized control over economic decisions.
Their open-ended mandate of economic equality, however, cannot be achieved, adn they know it. The unreachability is a feature, not a bug, of their demand.
The case that complete economic equality is impossible is easily demonstrated. For example, say Bernie Sanders found a magic wand which made everyone financially equal at dawn tomorrow morning.
Say 20,000 people pay $50 to see LeBron James play basketball. By the end of the day, James is $1 million richer, while the 20,000 are $50 poorer.
More broadly, there will be millions of transactions involving people buying and selling goods and services that day, which will result in some people having more money and assets than others.
Inequality in just one day.
How does society re-set and make all wealth equalized again on day two, short of a magic wand? It is of course absurd to think this process could be repeated every day. And if it were attempted, what incentive would there be for the productive to create goods and services for exchange if they won’t be allowed to keep the benefits of their efforts?
Some insist that economic inequality is “morally wrong.” But if the “inequality” is the result of people willingly engaging in voluntary exchanges, why is there a need to reverse the results of these transactions?
And there’s the rub.
Inequality resulting from voluntary, free-market transactions is not objectionable. Inequality resulting from political power and privileges, however, is worthy of scorn. But it’s the first type of inequality that progressive lament, while favoring policies that create the second type.
Indeed, progressives who most loudly complain about inequality typically favor the very government interventions that lead to much of the inequality they complain about.
Massive government “stimulus” or “relief” programs require printing trillions in new money out of thin air to finance. The result of such an influx of fiat money inflates asset bubbles in housing and the stock market, further enriching the already wealthy investor class that owns the majority of such assets. Meanwhile, the resulting price inflation crushes the little guy.
Expansive welfare programs generate poverty traps, creating government dependency while destroying the two-parent household. North Carolina families are five times as likely to be in poverty when there is no father in the home.
Mountains of regulation favor incumbent firms, protecting them against competition, enriching those already at the top, and discouraging new, potential upstart entrepreneurs.
So-called affordable housing programs actually drive up housing prices and restrict the supply of affordable housing. The result is an increase in the value of the assets of wealthy homeowners and an increased difficulty for low-income people to acquire an asset that could help them build wealth.
Corporate welfare programs that line the pockets of wealthy “green energy” cronies, while driving up energy bills and increasing “energy poverty,” also exacerbate inequality.
Per usual, progressive policies make worse the very problems they claim to solve.
Finally, if complete economic equality is not their goal, what level of inequality would progressives be satisfied with? They’ll never tell. And “less than what we have now” is not a valid answer, because that is a constantly moving target.
Surely the only potential way to achieve full economic equality is for everyone to be completely impoverished, so there is no wealth available to exchange hands and resume patterns of inequality.
In sum, it is critical to recognize that progressives’ goal of “economic equality” is unrealizable, and they know it. That’s why they talk about it incessantly. Because it can never be achieved, the centralization of further power into the hands of the political class can always be justified in its name. Economic inequality provides an open-ended blank check for a relentless and never-ending growth of government power at the expense of our freedom.