3. The Equality of Incomes as an Ethical Postulate

Against the assertion that all men should have equal incomes, as little can be said scientifically as can be said in support of it. Here is an ethical postulate which can only be evaluated subjectively. All science can do is to show what this aim would cost us, what other aims we should have to forego in striving to attain this one.

Most people who demand the greatest possible equality of incomes do not realize that what they desire would only be achieved by sacrificing other aims. They imagine that the sum of incomes will remain unchanged and that all they need to do is to distribute it more equally than it is distributed in the social order based on private property. The rich will give as much as they receive over and above the average, and the poor receive as much as is needed to make up their incomes to the average. But the average income itself will remain unchanged. It must be clearly understood, however, that this idea rests on a grave error. It has been shown that, in whatever way one envisages the equalization of incomes this must always and necessarily lead to a very considerable reduction of the total national income and, thus, also, of the average income. On this showing, the matter takes on quite a different complexion. For we have then to decide whether we are in favour of an equal distribution of income at a lower average income, or inequality of incomes at a higher average income.

The decision will depend, of course, essentially, on how high one estimates the reduction which alteration in the social distribution of income will cause. If we conclude that the average income will be lower than that received to-day by the poorest, our attitude will probably be quite different from the attitude of most socialists of the sentimental type. If we accept what has been said in the second part of the book about low productivity under Socialism and especially the contention that economic calculation would be quite impossible, then this argument of ethical Socialism also collapses.

It is untrue that some are poor because others are rich.1  If a order of society in which incomes were equal replaced the capitalist order, everyone would become poorer. Paradoxical though it may sound, the poor receive what they do only because rich people exist.

And if we reject the argument for the general conscription of labour and for equality of wealth and incomes which is based on the statement that some have their leisure and fortune at the expense of the increased labour and poverty of others, then there remains no basis for these ethical postulates except resentment. No one shall be idle if I have to work; no one shall be rich if I am poor. Thus we see, again and again, that resentment lies behind all socialist ideas.

• 1This, for example, is also how Thomas Aquinas imagines it. See Schreiber, Die volkswirtschaftlichen Anschauungen der Scholastik seit Thomas von Aquin, Jena 1913, p. 18.