Never mind the gap

Max Borders | Editor, The Freeman

The essence of the superior man is that he is free of … envy. Conscious of his capacity to survive and prosper within his own field, he has no desire to change places with anyone else, and hence he is incapable of envying anyone else. Thus he is inevitably a bad democrat, for democracy is a practical matter is based mainly and perhaps almost wholly on envy. — H. L. Mencken

There’s a growing gap between rich and poor. Didn’t you hear? (It’s been reported here, here, here, here and of course here.)

So. What.

I can think of no more meaningless an “issue” than this. It’s not just the recent reports on census data; the narrative is perennial. I realize income inequality is a bee that buzzes incessantly in the bonnets of progressives. The MSM leaped on the “story” like frat boys on a pizza. But take it from one who drives a 1995 Mazda Protégé: It doesn’t matter. We need to think more critically about this so-called “gap” before shaking our heads anymore in either sanctimony or shame.

The poor person in America today enjoys more goods, services and greater quality of life than any poor person ever has in human history. Inequality of outcome makes that possible. Indeed, compared to most of the rest of the world, the American poor have it made. In the United States, the poor live longer and better lives than any 18th-century nobleman.

“But people do not experience life as an interesting moment in the evolution of human societies,” rejoins Timothy Noah of Slate. “They experience it in the present and weigh their own experience against that of the living.”

It’s a funny thing. I haven’t noticed the poor pulling at the gilded gates of the rich, threatening to tear them down. Even crime is down. Many of the working poor are prepared to turn the worst of the redistributionists out on their ears in November. Why? Maybe because they’ve learned the welfare state does little for human dignity. Maybe it’s because they’ve seen where that road leads — to ghettos, crime and a permanent underclass. Maybe because they see no common sense in further weighing down those who might employ them.

Or maybe they just don’t wallow in envy.

No, the only people who notice “the gap” today are so-called intellectuals — trustafarians and others many of whom — themselves — grew up slurping at silver spoons. They often become writers, academics and activists, perhaps in order to assuage their own guilt.

The poorest in America get free healthcare, food stamps, subsidized housing, and pay virtually nothing in taxes (and of course, none of these benefits are counted by the Census as income). Their kids get free schools and free lunches. The only way leftish demagogues can continue to oil the guilt/envy machine is to relativize poverty — that is, to compare the poorest with the richest. And that is nothing more than an appeal to people’s baser instincts. It’s a political call to class warfare that the rest of America has simply left behind.

In “reporting” about poverty, both the poor and the rich are often referred to as abstractions — classes or quintiles — rarely as individuals. Unless we’re being offered some anecdote designed to divine our crocodile tears, we won’t hear about real people. We’ll be given stats framed to elicit a certain response. We rarely hear the story of a welfare recipient with an Acura, gold teeth, fat rims and a two-pack-a-day habit in Slate or Salon. But we’ll pay for his reckless lifestyle over and over again. And this person is not exceptional.

We won’t hear about her, but we’ll all pay for a woman to collect permanent disability benefits. Because once she gains just three more pounds, she’ll be considered “morbidly obese” by the state. We’ll subsidize the rest of her life in front of a bucket of fried chicken, then pay for her triple bypass when that day invariably comes. People who actually work hard for a living know people like this woman. They live next door to her. And they are understandably tired of the policies that created her. But to read the paper, all this woman is to you and me is a data point taken by a census worker, which somehow makes the existence of Bill Gates become unconscionable.

So when it comes to the “Great Divergence” — a.k.a. “the gap” — the essential question becomes: What exactly is your point? If your goal is to alleviate poverty or perhaps to raise the baseline for what constitutes a minimum level of income that most people, conservative, liberal or libertarian could tolerate — maybe that‘s something we can talk about. But that is not the same thing as worrying about how much money the rich have.

Even if we discovered that the rich got richer and wages for the rest of us stagnated due to health care inflation (a very likely scenario showbiz economists like Paul Krugman willfully ignore), the problem would be healthcare inflation, not “the gap.” If we discovered that a lot of people are poor because we subsidize them to remain so, the problem would be the perverse effects of the welfare state, not “the gap.”

Milton Friedman once proposed a negative income tax that would give every American a minimum amount of money to live on. Charles Murray built on Friedman’s idea in his book In Our Hands. Murray proposes a universal basic income to replace the bloated welfare state and its armies of functionaries. I interviewed Murray about his idea a few years ago:

Murray: The idea is a direct descendant of Milton Friedman’s proposal for negative income tax … considerably revised, but on a much bigger scale and doing much more. I’m not using this just to cure poverty. I’m using this money to take the place of Social Security and Medicare and Medicaid and all the rest of those kinds of things.

Borders: I take it that your system, to get the $10,000 per year, we would have essentially to abolish all other entitlements and transfers.

Murray: That’s absolutely essential. It’s not on top of an existing system of payments; it is instead of.

Now, if you really care about the poor, that’s an idea worth discussing. So also is a citizen’s dividend. I admit these would still require wealth re-distribution and could introduce unintended consequences. But let’s not confuse the merits of this or that approach with how much money the wealthy have relative to the poor. Because when it comes to genuine concerns about poverty, the latter dog won’t hunt. Simply said: worries about how much money people have terminates in naked envy. And a politics based on envy is nothing more than a mob organized around cave man ethics.

Cave man ethics? Maybe that sounds harsh. But consider that human beings evolved in far different conditions than we live in. So let me explain, lest I offend anyone for whom “distributive justice” is an organizing principle. Consider the Stone Age Trinity:

The late philosopher Robert Nozick pointed out that when people compare themselves to one another, they are disposed to feel one of two emotions — guilt or envy. Guilt when someone has a lower station than you; envy when someone has a higher station than you. I would add a third to this mix: indignation. That’s when you compare someone of a higher station to someone of a lower station, and feel that something is wrong. I refer to this complex of emotional responses to unequal life-stations as the “Stone Age Trinity.”

Why Stone Age?

We carry with us all the equipment required to survive on the ancient steppe. Which brings us to egalitarianism: think of how it might have been important for our ancestors to behave in terms of hoarding and sharing. From an evolutionary perspective, it made perfect sense to behave in an egalitarian manner within the tribal band. For in the absence of refrigeration or other preservation practices, food spoiled, so hoarding made little sense. Most hoarders would have failed to pass on genes. Agriculture was absent until about 10,000 years ago, so survival of the Stone Age group rested on sharing, reciprocity and division of labor. (Read more.)

None of this, of course, is meant as a criticism of those who have concerns about the poor. Indeed, I think we can all applaud those who’re willing to give charitably — rather than simply exit the polls puffed up on cheap rectitude and an “I voted” sticker.

But if we organized society today around the fact that you don’t like that someone has more of something than someone else, then we would not only “re-distribute” sexual partners, but require playboys and playgirls to remain celibate on odd days. Inequities in looks and charm, after all, create inequalities in what human beings really want (sex, of course, being one of Abraham Maslow’s “basic needs”.) Perhaps we should also ask people who are funnier to limit their jokes to a quota? Oh, and tall people: we’ll have to cut ’em off at the knees.

Here’s a thought experiment:

Suppose guaranteeing every poor person in America enough resources to come by three daily squares, clothing, shelter, a cheap cell phone, basic medical care and a means of transportation to-and-from a part-time job meant we had to let 25 people keep 25 percent of the U.S.’s wealth. Would you do it? Put another way, if we just stipulated that in order to amass the resources to help every poor person live comfortably a handful of people had to become super rich…would you do it? The alternative would be that the poor may not be guaranteed help and receive less, but the rich would be brought down a few rungs.

As you may have figured out, I’m trying to drill down whether worries about “the gap” are concern for the poor, or envy wrapped in some zero-sum notion of prosperity. The way someone answers that question will tease out the difference between someone who’s embraced an ethics of envy and someone who genuinely cares about the poor.

No one likes rent-seekers and crony capitalists (except politicians). But all this hostility towards corporations and support for policies that hobble them is just more envy-mongering. We can do better than hating the wealthy and blaming business for everything under the sun. We can do better than punishing productivity and handicapping job-creating companies with bad policies like minimum wages — which raise the cost of offering someone a job at all. We can do a lot better. And we can start not by minding the gap, but by letting the rich create wealth for all and keep what they earn. Then we can talk about how best to take care of those who clearly can’t take care of themselves.

Max Borders is a broke writer living in Austin, Texas. He blogs at Ideas Matter and MaxBorders.com

Tags : bill gates economics food stamps milton friedman paul krugman poverty socioeconomics
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