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What’s With Income Inequality?

What’s With Income Inequality?

By Fernando Teson

Many have been surprised by the rapid surge of the issue of income inequality. Thomas Piketty’s book spawned academic and popular interest in the topic. The idea that the main problem in society is income inequality was quickly and enthusiastically embraced by left-leaning philosophers, economists and, in an unusual move, by politicians running for high office.

Much has been written about the subject. In this post I offer a conjecture to explain the sudden surge of income inequality as a philosophical and political issue.

As is well-known, Rawls expressly allowed for income inequality as long as it worked for the benefit of the poor.

With the publication of John Rawls’ A Theory of Justice in 1971, academic writing on social justice centered on Rawls’ famous difference principle as the touchstone for justified institutions. The idea that political institutions should be arranged to benefit the poor was a powerful concept that for many years rallied political theorists of various persuasions. In particular, the principle seemed consistent with considerable amounts of economic freedom and entrepreneurship, as long as the state had the wherewithal to correct outcomes toward the Rawls-superior position, that is, to select, of the available institutional packages, the one that would place the least advantaged members of society in the best possible position. As is well-known, Rawls expressly allowed for income inequality as long as it worked for the benefit of the poor.

The objective must be to eliminate poverty, and not achieve equality or reduce income inequality

The objective must be to eliminate poverty, and not to achieve equality or to reduce income inequality | Photo Courtesy: Pixabay

Rawlsian liberalism became a sort of obligatory point of reference for the mainstream of the profession. For many decades, virtually all discussions about social and economic justice treated concern for the poor as the golden standard from which every discussion had to start —and often also end. True, some self-professed Rawlsians’ were a bit uncomfortable with the allowed inequalities of the model, but in general tended to go along with Rawls’ central idea.

Then, all of a sudden, something strange happened. It became quite clear on the available evidence that robust, well-functioning markets were a necessary condition to lift people out of poverty. This new evidence was devastating to the liberal left. Hundreds of academics, pundits, and politicians had built entire careers criticizing capitalism, markets, property, consumerism, and the like. How could they now ignore the evidence that robust markets help the poor? In all honesty, they would have had to concede that they had been wrong all along, and that the evidence now favored some form of capitalism as the best way to lift people out of poverty.

The inequality issue is, in my judgment, a non-issue, a kind of scam.

This, of course, would have meant unconditional surrender. So, the solution was for the left simply to abandon the concern for the poor and focus instead on the income gap between rich and poor. In that way, they could simultaneously show concern for the poor, since they could  decry how worse off they are with respect to the rich, and salvage their hostility to markets, since markets generate inequalities.

The inequality issue is, in my judgment, a non-issue, a kind of scam, for the very reasons that Harry Frankfurt offers in his long-awaited book, just released, and endorsed by Jason Brennan yesterday. I quote from the back cover:

“We are morally obligated to eliminate poverty—not achieve equality or reduce inequality. Our focus should be on making sure everyone has a sufficient amount to live a decent life. To focus instead on inequality is distracting and alienating.” 

Jason put it well:

“The problem isn’t that some people have more; it’s that some people don’t have enough. The poor of the third world die of starvation, not inequality. The poor suffer because they don’t get what they need, not because they get less than the rich.”

In my view, income-equality peddlers have one chief motivation: to avoid conceding that Rawlsian normative commitments require them to support markets. This is just a conjecture, but I have some evidence for it: I have yet to find one Rawlsian liberal who abandoned her prior hostility to markets and accepted, in the light of the massive empirical evidence, that she is required to support capitalism. Her move is instead to change tacks and suddenly declare that reducing income inequality, and not alleviating poverty, is the new ethical goal. You be the judge.

Fernando Tesón, a native of Buenos Aires, is the Tobias Simon Eminent Scholar at Florida State University College of Law. He is known for his scholarship relating political philosophy to international law (in particular his defense of humanitarian intervention), and his work on political rhetoric.

This article was originally published on Bleeding Heart Libertarians

Featured Image Source: Pixabay

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