In honor of the 50th anniversary of Lyndon Johnson's "War on Poverty" and the abject failure of it, it may be time to come to a simple conclusion ... income inequality is one of the main benefits of capitalism. Benefit, you ask? How can something so egregious be a benefit?
First of all, it is not egregious. It is a fundamental truth that incentives drive human behavior. Self-interest has been the driving force behind every advance in human society since, well, since the beginning of human society.
The rich may very well be getting richer, but contrary to popular belief, the poor are not getting poorer. When your income is nothing, you can't get poorer, and by the progressive measurement, the poor have nothing.
They neglect to mention that even the poorest in America live better than many of the well-off in other nations. That is an argument for another day. We are here to discuss the benefits of income inequality.
Capitalism is the only economic system that recognizes the natural human inclination towards self-preservation.
Income inequality has always been with us. Prior to capitalism, wealth was determined solely by heredity. You were born wealthy or you were born poor. There was no way to change your status. Suddenly, almost organically, actually it was just after the most significant period of global warming known since the end of the first ice age, there arose a middle class of merchants. Trade became a worthwhile industry, and it made many people wealthy. People with the knack and skill for buying low and selling high were being rewarded for their acumen, and this encouraged more people to try their hands at it.
Risk-taking resulted in the expansion of both the known world and the free market. People made and lost fortunes. Wealthy people without the ability to maintain their wealth lost it, and poor people were finally able to rise out of their poverty and amass great wealth.
Through the simple act of exchanging goods for other goods, made simpler by the creation of legal tender, also known as money, an entire market was born. A free market.
Risk is called risk for a reason, and there are, or at least should be, consequences for poor decisions. In the private sector, poor decisions result in bankruptcy. In the public sector, poor decisions lead to more poor decisions to repair the initial poor decisions, which result in more poor decisions to try to save the previous poor decisions, etc.
If politicians understood how business worked, they would be businessmen, not politicians.
There are incentives and there are disincentives. Capitalism provides the incentive to strike it rich, to make a million on pure hard work and ability.
The war on poverty provided poor people with an incentive to stay poor, or a disincentive. Why would any sane person make the effort to find a job, work hard at it, and try to improve their own lot in life when the government is more than willing to provide at least a basic living for nothing.
What is lost in all this is the forfeiture of human capital. How many great inventions and innovations have been sacrificed at the altar of free government cheese.
The economic system envisioned by Johnson and the rest of his progressive cronies has come to fruition to some degree. The income gap is wider than it has ever been, but it is not because of the free market. The disparity is due to their taking the free out of the free market.
As long as there is the possibility of making, and keeping, a fortune, the best and the brightest will continue to pave the way to a better future for all of us. As long as the idea that the wealthy owe it to the poor to provide them with the means to exist at the expense of their own happiness, the best and the brightest will find a way to game the system.
Why make when it is so much easier to take?
As long as empty political rhetoric echoes through the halls that once housed the greatest minds of a generation, created the greatest political system known to man, which espoused the freedom to allow the greatest economic system known to man to thrive, we will all suffer.
When the poor see the wealthy, we should aspire, not despise. This is the essence of capitalism. My creation benefits you, and I should be fairly compensated for it. Your creation benefits me, and you should be fairly compensated for it. Both of our creations benefit mankind.
It has been said that a rising tide lifts all boats. Let the tide rise and the war end. Poverty is a natural resource. The poor don't stay poor any more than the rich stay rich. In a free market, they have the incentives, the means, and the opportunity to get rich. Disincentives provided by government largesse, under the guise of a so-called war on poverty, do nothing but deprive society of the benefits of the fight to rise from poverty.
Ask Bill Gates if he would have worked so hard if he knew he would have had to share the fruits of his labor before he was ready to.. Forbes, Buffet, Soros, Romney, ask them all.
Incentives matter, and without them, mankind would still be living in hereditary slavery, doomed to eke out a miserable existence in the service of somebody that just happened to win the sperm lottery.
The war on poverty is really a war on capitalism, which amounts to a war on humanity. Let's call a ceasefire, and let the income chips fall where they may.