There has been much debate over the nature of wealth inequality, which is the simple fact that some have more resources than others. For some folks, wealth inequality is viewed as a good thing. After all, someone needs to create jobs. And what incentive do people have to work hard if gaining greater access to resources just doesn’t happen, if no one is the rich person? And why shouldn’t people be able to keep their money? For other folks, wealth inequality is a bad thing. After all, the rich folks aren’t using all that money strictly for necessities while others could really use some help getting to those necessities. It doesn’t harm them appreciably to have less wealth and it helps others a great deal. Why should some suffer and some live in the lap of luxury when all could be provided for adequately?
I think that folks on both sides of the issue have some fair questions. True wealth equality, particularly mandated by the state, creates an obvious problem. It removes a key incentive for people to work hard, to reach their potential, to achieve excellence. While it would be fantastic if people were so dedicated to their trade that excellence alone was their goal and they were content to live on whatever could be allotted to them, that just doesn’t happen for most people. For a few people like me, it might. But I recognize that I am hardly in the middle of most bell curves and generalizing from my experience would be problematic. Most people work hard to provide for themselves and their families, not out of a sense of duty to their artistic calling or the like. I know because I’ve done a wide variety of jobs, and I rarely meet people who do the job because they love it.
Vast wealth inequality also removes a key incentive for people to work hard, to reach their potential, to achieve excellence. When the definition of wealth is that of a soaring, gigantic wealth, then it seems unattainable and fewer people will be inclined to reach for it because the odds of attaining it are low no matter how hard you work. It’s more efficient for them to languish in mediocrity. In addition, when the number of people in poverty increases and the average income decreases for those in poverty, that starts to make it difficult for people to do what it takes to attain better incomes. Attaining a better income might require internet access to search for jobs, transportation to go to the interviews, or moving costs to get to their new job in another state. If people don’t have the financial wherewithal to do those things because their current job is only part-time or pays a very low wage that won’t keep up with the living expenses in their city or town, they often get discouraged and feel trapped. I know because I’ve worked with and supervised many people in those low-paying positions.
The better situation lies somewhere in between the extremes of true wealth equality and vast wealth inequality. We need wealth inequality to motivate the risk-taking and hard work necessary for a successful economy, but not so much wealth inequality that we have a few landed gentry and a large population of serfs while the middle class is driven to extinction. Unsurprisingly, those likely to end up being the landed gentry are more likely to be okay with lots of serfs. Also unsurprisingly, those likely to end up being serfs are more likely to be okay with government-mandated wealth redistribution.
So what causes the vast wealth inequality? If you listen to liberals, the excesses of corporate executives and greed of the very wealthy is largely to blame. While it is true that some executives and other wealthy individuals are greedy, soulless pretenders to humanity, many are also quite generous with their wealth and engage in a great deal of philanthropy. I’ve known both types in my day. If you listen to conservatives, the welfare kings and queens and those too lazy to work are largely to blame. While it is true that some people are content to sit on welfare or unemployment as long as possible and scrape by on the work of others, many workers are also quite industrious married or single parents working two jobs to make ends meet for their family or young people working to fund their education. I’ve known both types in my day. In essence, both liberals and conservatives have a point in that both callous greed on the part of some of the “haves” and laziness on the part of some of the “have nots” are helping to generate an increase in wealth inequality.
So what’s the solution? Conservatives suggest easing the tax burden on the wealthy investors, the owners of much of the capital. That might actually work if all the investors were willing to take the risks that come with job creation in an economy like this. Not that I blame the investors for engaging in perfectly normal and healthy risk aversion, but most of them are not creating jobs all willy-nilly, and increasing the amount of money they keep isn’t going to change their risk aversion strategies in most cases under current circumstances. Liberals suggest increasing the tax burden on the wealthy to help fund the welfare programs. That might actually work, but for the most part, those who can get jobs and want them have a job (albeit perhaps not exactly what they want or need), and those who can’t or won’t get a job probably aren’t just going to randomly change their situations or minds, respectively. Like the plan of the conservatives, the plan of the liberals wouldn’t get much accomplished by itself. Both plans might have more efficacy if we weren’t so far in debt and dealing with global economic instability while also facing generational trends that cause a serious drop in the cultural value of hard work and a massive number of older folks collecting Social Security benefits among other fiscal issues.
I don’t think the answer is corporate welfare any more than I think the answer is social welfare because I recognize that the problems are often human problems rather than political problems. Policy has little power to change the character of a person, which is what needs to change more than anything. Some folks are content to get by on the grace of charity when they could work for a living, and some folks don’t care who they have to step on to make an extra buck. Neither of those things is good. Both corporate greed and worker laziness should be addressed, but for apparent human psychological reasons, people are loathe to change their behavior for the better and quick to rationalize their bad behavior. And as long as the parties who are in the wrong are willing to justify their lack of virtue by pointing out how the other party is also lacking in virtue, nothing will change. What we need is for people to come together and agree to improve their behavior rather than focusing on what the other party is doing wrong. But what are the odds of that happening? Not good, especially when the leaders of both the major political parties in the U.S. are setting an example of pointing fingers at the other party while not dealing with their own failings.
Perhaps it will happen someday that people will be serious about cultivating virtue and we can have a spectrum of wealth which promotes economic growth. That’s my vain hope.