As the 2014 election approaches, President Obama is trying to shift the discussion from the Affordable Care Act to inequality of income.
The problem is that much of the debate is focused on the wrong things.
Inequality is inevitable in a free enterprise system because people have different talents, ambitions and work ethics. What should we do about that?
If I choose to work 40 hours a week and you choose to work 20, and I make $50,000 a year and you make $25,000, is it unfair I make more money? Is it unfair you have more leisure time?
Should the government equalize our income by giving you some of my money? Should it equalize our leisure by making you do some of my household chores?
When we look at inequality in a broader sense, what’s more important, inequality of income or the standard of living of the poor?
Doubling everyone’s income would increase the standard of living of the poor but also increase inequality of income. Would you oppose that?
The point is that our primary goal should be to increase the standard of living of the poor. And there is a strong correlation between a higher standard of living for the poor and more economic freedom, meaning lower taxes, protection of property rights, less regulation and wealth redistribution, and fewer trade barriers. For the results of a 30-year study by the Fraser Institute, see: http://tiny.cc/eetk9w and http://www.freetheworld.com/.
That doesn’t mean we shouldn’t oppose the causes of inequality we can do something about, such as government favors to politically-connected businesses and groups. But in that case, we are opposing favoritism, not inequality.
It also doesn’t mean we should ignore the consequences of inequality we can do something about. For example, if the rich have unequal political influence, instead of restricting their political speech through campaign finance laws, why not reduce government meddling in our lives so there are less government policy decisions to influence?
In any event, in most cases, we’re really concerned about inequality of opportunity, not inequality of income. And providing kids with a good education is critical to giving them equality of opportunity and a fair chance in life.
Ironically, those who claim that inequality of income is our biggest problem often are the same people who oppose education reform and instead just want to increase education spending.
We’ve tried that, and it hasn’t worked. Over the 50-year period ending in 2007, per-pupil spending adjusted for inflation more than quadrupled to $12,463 per year with little to show for it.
Maybe it’s time to try something new, such as vouchers parents can use to pay for private schooling for children stuck in failing public schools. This won’t reduce per-pupil spending in public schools because you can educate a student with a voucher for less than it costs to educate the same student in a public school.
Here’s the point. Instead of complaining about inequality of income, why don’t we reduce inequality of opportunity where we can?