Inequality

Patrick Henry
4 min readApr 20, 2020
Capitalism is the cure, not the disease.

Here’s a joke heard on right wing radio. God decides he’s made a mistake with creation and he will destroy the earth in 24 hours. He sends out a press release to major media. Headline in WSJ: Earth To End Tomorrow; Markets Will Close Early. Headline in NYT: Earth Ends Tomorrow; Women & People of Color Disproportionately Affected. In the Progressive religion, inequality is the Original Sin and the chief virtue is diversity.

Capitalism is very efficient at creating wealth, but it creates winners and losers. Some people are shrewder, more ambitious, more energetic, more ruthless or more creative than others. There is also a lot of luck involved. People born in the right place and time with the right genes have a better chance, but lots of those so blessed screw it up anyway.

Socialism does yield equality. Everybody (except the apparatchiks) is equally poor, because socialism destroys more wealth than it creates.

Our compromise has been the welfare state. It takes money from one group of people and gives it to another group, in a spectacularly inefficient fashion. It also denies the receivers the dignity of self support and the satisfaction of useful endeavor.

What would we do if we were serious about addressing inequality in a way that did not destroy or waste wealth?

We would start by forcing the winners to work for their reward. If we severely pruned back the regulatory state, we would eliminate a multitude of opportunities for those who can afford lawyers, accountants and lobbyists to shape the rules and work them to produce monopoly profits. If we actually enforced anti-trust rules, we would force the economic winners to continue working/innovating to keep their winnings, and we would dramatically reduce the opportunity for outsize profits. Constant competition would generate improvements that create more wealth for everybody to enjoy.

We would start work at the other end of the economic spectrum by frankly acknowledging that a lot of poverty is caused by dysfunctional behavior — drug and alcohol addiction, obesity, scorn for education, sexual predators, and so-called leaders who preach victimology. If we can’t put the right name on things, we will never succeed at addressing the problems. Our public policy and education systems would highlight the downsides of dysfunctional behavior instead of excusing it or ignoring it.

We should break up the public education monopoly and work to provide every child with an education, including work/study programs (certified by employers to be teaching marketable skills) that prepare them to earn a decent living and impart the economic literacy/deferred gratification skills necessary to cope with life’s challenges. The government could provide a voucher and accredit the institutions of learning.

We should offer any addict a no-cost rehab, but no public assistance of any kind. Human beings should be free to destroy their lives by ingesting mood altering chemicals, but taxpayers should not be obligated to support their habit. Anti-social behavior (defecating on the sidewalk) is a public health hazard and should be a crime that is punished aggressively.

The government should be the employer of last resort. If the economy isn’t producing enough jobs to give everybody the opportunity to do useful work, there are lots of jobs that need doing (like maintaining public restrooms). Any able bodied person seeking public assistance should be put to work. Welfare should be confined to those who are truly incapable of taking care of themselves. That should include street dwellers who have psychological disabilities. That group deserves the expenditure of public funds.

We can even have quality medical care for everybody without the heavy hand of bureaucracy and the tsunami of fraud. Let’s call it health care for all instead of Medicare for All. Give everyone below a certain income level a voucher and let medical providers compete for their business. The government can confine itself to accrediting providers. By breaking up the medical school monopoly and allowing nurse practitioners to treat patients, we can greatly expand affordable care in an efficient fashion. The system can be backstopped with catastrophic care protection.

The short answer is that capitalism, as opposed to the crony capitalism/grab bag redistribution we currently practice, will do more to alleviate income inequality than the solutions proposed by progressives. Those solutions simply double (or triple) down on the stuff we are currently doing that isn’t working. The proper answer to a failing policy is not to throw more money at it.

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