Sociologist Mike Savage’s new book, The Return of Inequalilty, is the latest in a long line of unsuccessful attempts to demonize and eliminate inequality. James R. Rogers provides an interesting and useful discussion of it in his review, “Is Inequality a Problem?” on the Law and Liberty website. But what I was most struck by was the picture shown for the story, showing a placard saying “Capitalism Thrives on Inequality,” followed by five exclamation points.
The placard’s “theory” does a pretty good job of providing a nutshell summary of the line of thought being promoted: capitalism causes inequality, which harms us, and that result that could be avoided by substituting some other system. However, that represents serious distortion rather than serious diagnosis. We are all different (which virtually everyone seems to accept, until it is demonized as inequality). No system avoids that universal truth. Further, capitalism (I prefer “a private property–based system of voluntary arrangements”) is the most effective means ever discovered to turn the fact of our differences into gains for all of society.
In fact, one of the best rebuttals of Savage’s book predates it by decades. It comes in Leonard Read’s “Inequality Enshrined,” chapter 14 in his 1974 Having My Way. Put it into a similar nutshell, Read argues that some forms of equality are inconsistent with more important forms, as when equality of results rationalizes unequal treatment, rather than the equal treatment that is the ideal of liberty. Further, some inequalities are inseparable from crucial social benefits, as the massive joint gains from specialization among people with differing abilities coordinated through voluntary market arrangements.
Read’s thoughts merit remembering.
- Books, speeches, expressed yearnings … have much to say in favor of equality … [but] inequality exists, fortunately!
- We have here a semantic trap…. Once we accept the idea that all men are equal before God, we [may] think of equality as … a condition to be sought … a dangerous notion, completely at odds with reality.
- What this affirmation is intended to convey, really, is that all men are subject to the Universal Laws indiscriminately; there are no favorites; there is a common across-the-board justice. With this in mind … reflect on the distinction between common justice and equality.
- The ideal civil law … is unbiased as to who or what we are…. Civil laws … intelligently drawn—are indiscriminate; they confer no special privilege on anyone … their hallmark being a common justice.
- We are—one as much as another—beneficiaries of fairness and justice.
- We have equal rights … provided “rights” are properly defined and circumscribed. Any person … has as much right to life, livelihood, liberty as any other—provided his actions are peaceful, that is, noncoercive … when thus circumscribed, the equal rights concept makes no claim on any other person; it is, instead, an appeal to reason, morality, justice.
- Most people put no such boundaries on “equal rights.” Blind to the rational limitations of this concept, they are carried away with “equality” and demand equal pay, rights to a job … mere wishes are thought of as rights.
- These demands for equality, beyond the rational boundary … rob selected Peter to pay collective Paul—feathering the nests of some at the expense of others.
- Freedom and equality are … mutually antagonistic. The equality idea … rests on the antithesis of freedom: raw coercion. It is … impossible to be free when equality is politically manipulated.
- We come, finally, to the economic case for inequality. Not our likenesses, but our differences, give rise to the division of labor and the complex market processes of production and trade … it is to our advantage to specialize and to trade with other specialists.
- By thus serving others—and becoming ever more skilled and outstanding (unequal) in the process—he best serves his own interest.
- This comparative advantage in trading, which rewards the most renowned specialist, also rewards in similar fashion every other party … each gains from the trade … each finds a comparative advantage in trading—if it is voluntary.
- Not only does this blessing of inequality flow from the mental or physical skills of traders; it also pertains to the capital, the tools of the trade, the savings and investments by individuals. The specialist who saves and develops tools becomes ever more specialized and efficient. And it is to the advantage of every participant in the market to encourage the saver and investor by respecting and protecting his property—even though the result is greater inequality of wealth than before.
- The procedure is to cultivate and accentuate their differences in skills and in private ownership and use of property—these being the requisites for a flourishing and beneficial trade.
- Sadly, the misunderstanding and misapplication of the concept of “equality” affords a major explanation for the leveling programs … in the world today.
- [Embrace] this fact of Nature—inequality—and, also, its working handmaiden: human freedom … permit anyone to do anything he chooses so long as it is peaceful.
Leonard Read saw common justice—the form of equality necessary for individual liberty and social cooperation—being crowded out by attempts to impose more equal results, which jeopardizes the vast gains from our differences (inequalities), developed and used on behalf of others through voluntary market arrangements. Those are crucial lessons to learn if we wish to revive common justice, now widely violated, and expand the mutual blessings made possible only by our differences, which are undermined when they are erroneously defamed as unjust inequalities.
