Inequality

What Bernie Sanders Gets Wrong About Capitalism

The poor are not getting poorer.

|

Socialists like Bernie Sanders tell us that "the rich get richer, and the poor get poorer."

That's a lie.

Yes, rich people got absurdly rich. Last year, says Oxfam, "the wealth of the world's billionaires increased (by) $2.5 billion a day."

I say, so what?

The poor did not get poorer. Bernie's wrong about that. The poor are much better off.

"As we've increased the number of billionaires around the world, extreme poverty has shrunk," says former investment banker Carol Roth in my video about inequality.

She is right. Over the past 30 years, more than a billion people climbed out of extreme poverty. Thanks to capitalism, more than a billion people no longer struggle to survive on a few pennies a day.

Bernie is correct when he says that the wealth gap between rich and poor grew. In America over the last 40 years, the richest people got 200 percent richer, while poor Americans got just 32 percent richer. But again, so what?

Gaining 32 percent is a very good thing (all these numbers are adjusted for inflation).

Everyone's better off, despite the improvement not being even. It never is.

Now the myth:

The media claim in America there's "a lack of income mobility"—that people born poor are likely to stay poor.

Some do. It's true that people with rich parents have a big advantage. But it's a myth that Americans are locked into their economic class.

Economists at Harvard and Berkeley crunched the numbers and found most people born to the richest fifth of Americans fell out of that bracket within 20 years.

Likewise, most born to the poorest fifth climb to a higher quintile. Some make it all the way to the top.

In fact, says Roth, "3 out of 4 Americans will hit that top 20 percent at some point in their lifetime."

You see America's income mobility on the Forbes richest list. Most of the billionaires are self-made. They didn't inherit money. They created their wealth.

Still, the very rich are ridiculously rich. The Forbes billionaires have more money than the bottom 64 percent of the U.S. population.

"Unfair!" say the progressives. "It doesn't matter if nearly everyone got richer, income inequality itself is a huge problem."

It's "threatening to tear us apart!" says New York City Mayor Bill De Blasio.

It might, if people come to believe that inequality itself is evil. But one question: Why is that true?

Progressives like to point out that in Scandinavian countries, people say they are happier than Americans. Scandinavians have more equal incomes than Americans.

But that proves nothing. Incomes are more equal in Afghanistan, too. Incomes are more equal when everyone is poor.

Forget money for a moment and think about how impossible it would be to make everyone equal.

I'll never sing as well as Adele or play basketball like LeBron. The best athletes, singers, dancers, etc., are just physically different. I'll never be as self-confident as Donald Trump or as verbally smooth as AOC.

"There's inequality in everything. There's inequality in free time, inequality in parents. I don't have any parents or grandparents," says Roth. "I have two kidneys. There are people out there who need one, don't have one that functions. Should the government take my kidney because somebody else needs it?"

I suggest to her that some people having so much more than others is just inherently unfair.

"Life is unfair!" she replied. "Unfair is good. Unfair is a feature. It's not a bug!"

Certainly, it's wrong if government makes rules that create inequality.

Racist laws forbidding some ethnic groups to do business where they please, or restricting where they live, are evil.

So are government subsidies to rich people and well-connected corporations.

But allowing people to be different from one another, to employ their unique talents and succeed or fail by them, to rise as high as the market will bear—that's an important part of freedom.

We won't all end up in the same place, but most of us will be more prosperous than if government decided our limits.

And we will be freer.

COPYRIGHT 2019 BY JFS PRODUCTIONS INC.
DISTRIBUTED BY CREATORS.COM

NEXT: Sorry, Bernie Sanders, but Disney Doesn't Have To Apologize for Making $1.3 Billion with Avengers: Endgame

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

    1. The problem with wealth inequality isn’t so much poverty, of course we should strive to eliminate poverty as an investment into everybody’s future to keep society safe and stable,
      but the dangerous thing about inequality, particularly the drastic inequality that we are facing today, is structural advantage
      Those who are so much more extremely wealthy than everyone else gain significant leverage over everyone, leverage over politics, leverage over the evolution of the market itself.
      It is extremely dangerous to let small groups of people exert so much control and leverage over society, they will end up steering it underhandedly in directions that they think make sense, and building infrastructure that doesn’t necessarily make sense. And just because things sell doesn’t mean they make sense for the long term, drugs sell, pollutive solutions sell.
      People need to make wise and prudent decisions that benefit the majority of society for the long term, people need real leverage to be able to do that, and they will be out-competed by the rich if we allow them to accumulate such vast amounts of wealth relative to everybody else. The rich will nearly always go for short term gains even if it means trashing the place for everybody else, why would they be motivated to care about the long term effects of their actions?

      1. If people closer to the bottom had the capital to invest in better things for society at their level, maybe there wouldn’t be so much of a desire to use police and government to solve all their problems.
        As an anarchist, I think it is government in the form of property rights, corporate limited liability benefits, and corporate welfare that are causes of this problem and the reason why the rich can gain such huge advantages, then leverage state power using these basic mechanisms to exponentiate their advantage

      2. Big government Bernie should scare us all. So now govt knows best…and citizens have no rights…not even to what they earned. Not even to their families!!
        Thanks to Robby for doing a POWERFUL story on New Mexico’s Child Protective Services!!

  1. The poor starve in the winter if their crops fail. Or if the Yankee soldiers take the hog before it is butchered

    1. Mark 14:7 King James Version (KJV)

      7 For ye have the poor with you always, and whensoever ye will ye may do them good: but me ye have not always.

  2. Thanks to those absurdly rich people, I had a thriving business. These people aren’t hoarding money- they are spending it and hiring people at decent wages.

    One of the families I trained dogs for lived in a $9 million dollar house. They had 6 full time employees and a couple of part time employees at the house. Those aren’t employees at a business but just in their home. Of course, they didn’t get the $250 group training classes; they hired me to come everyday to work with the dog in the home costing thousands more. Sometimes I transported the dog for them or took him to my daycare of boarding. Their dog groomer came to the home weekly as did her hairstylist earning top dollar.

    Moral of the story- if I had been surrounded by middle class or poor people, I would have been scraping by. With clients like these (and there were many in my part of Houston) I was making a really good living.

    1. You do dog training.

      We got an English Lab as a puppy. Big strong dog he turned out. So teaching him we needed some help.

      Long story, hired some advice and got nowhere. Finally found someone who knows what she is doing. We went out today to the pet store with him. He just needed to learn and wants to.

      Thousands? Dude not here. But good you got that.

    2. Did those rich folks ever, by chance, pay you to get a 2 yr old cocker/beagle mutt to stop digging holes in the back yard? If so, you should tell that story with full details of techniques and methods.

      1. I’ve got a boxer mutt, and the backyard looks like the Somme

        1. Ha, I like the metaphor (…simile?).

          My yard isn’t bad, but that’s only because I’m going out almost everyday to fill in a hole as soon as I see it.

          I rub the pup’s nose in the loose dirt and swat him, but that obviously hasn’t corrected the behavior. I feel bad swattin’ him all the time; I just don’t know what else to do about it.

      2. First step is don’t leave a cocker/beagle in the yard alone until it’s fully trained and mature.

  3. What Bernie Sanders Gets Wrong About Capitalism

    You’re going to need a much bigger blog.

    1. Nobody needs 23 choices of blogs.

    2. Nope, I only need one word to answer the question “What Bernie Sanders get’s wrong about capitalism?”

      Answer: Everything.

      1. Bingo!

    3. Yes…much bigger! Bernie doesn’t get capitalism.
      Another…even scarier part of socialism is believing govt knows best about your healthcare…so they get to decide for you!
      Worst…they know what’s best for your family! So they can take them away for any reason.!! It’s happening more often every day!!

  4. The Poor in American are The Wealthy in Our Republic,

    The Republicans might as well be Socialists,

    The Liberals are absolute Communists,

    and Libertarians are The Only Ones not Spewing Complete Nonsensical Gibberish!!3!!

    1. Well… less of it

  5. It might, if people come to believe that inequality itself is evil. But one question: Why is that true?

    It’s no coincidence that the Seven Deadly Sins include lust and greed and envy and the Ten Commandments include proscriptions against theft and covetousness* – it’s a dark side of human nature to want shit that doesn’t belong to you. And when you get Bernie Sanders promising you can have all the free shit you want if you just take it from your neighbor and theft’s a good thing, the proper response is “Get thee behind me, Satan.” Bernie isn’t ignorant, he’s evil.

    *Actually, if you look at the Ten Commandments, most of them are telling you not to take shit that doesn’t belong to you – God’s position, your parents honor, your neighbor’s good reputation, his contract with his wife, his property, or his life.

    1. Growing up, I used to hear “If it’s not yours, leave it alone” a lot from my parents. Of course, neither of them had a college education, so what could they possibly know about how the world works?

    2. Actually, the Ten Commandments -according to Rabbinical commentary in the the Talmud- state that Judaics should not kill, or steal, etc. from their fellow Judaics. They can kill or steal from the goyim depending on whether they are in a Jewish society (Israel) , green light, or a minority Jewish society ( Yellow light)

      1. P. J. O’Rourke once wrote that the Commandments mostly boiled down to “put that down, it doesn’t belong to you.” “Keep your hands to yourself”. And “Listen to me when I’m talking to you.”

        “Bill, keep your hands to yourself” “Hillary, put that down, it doesn’t belong to you.”

        1. That’s most likely the reason the 10 commandments are not allowed to be displayed in a government building.

  6. For anyone who’s been around for a while, it’s pretty apparent our current crop of elderly are much more mobile than the elderly of our youth. Thank the super wealthy football players for the advancement of knee surgery.

    We have two billionaires advancing access to space. I’m not doing that because I’m not a billionaire. (and yeah, I know they both take tax dollars. I’m guessing they wouldn’t if it wasn’t being thrust at them by desperate politicians intent on proving their relevancy).

    Let’s face it – people with average or below average income don’t do much that advances long term societal growth.

    Unequal incomes are what drives advancement.

    As to why Scandinavian countries are happier… Maybe their news organizations aren’t continually telling them the world is ending/sky is falling/wealthy are stealing your money/???

    1. “As to why Scandinavian countries are happier… ”

      What you said, plus, they have strong social proscriptions against complaining.

      1. And along with their income equality, they have an otherwise strongly homogeneous population. When just about everyone in your country looks like you, talks like you, hell, is probably related to you within a few generations back…it’s a lot easier to get along.

        Not to mention SMALL populations. Less than 6M each in Denmark, Finland and Norway (so about the same as Colorado), not 11M in Sweden (so about the same as North Carolina), and less than 500k in Iceland (Vermont).

    2. So they are happy. So what? It is dissatisfaction that drives progress!

      1. So true.

        To paraphrase Yoda: Happiness leads to complacency and complacency leads to stagnation.

  7. “What Bernie Sanders Gets Wrong About Capitalism”

    Everything.

  8. Bernie is deliberately lying to gain personal power, via the federal government, over the lives of millions of Americans. He is doing this to take away their personal liberty. To quote a Nobel prize winning politician, Period.
    Counterpoint;
    http://www.marketwatch.com/story/this-is-how-a-janitor-a-librarian-or-a-teacher-can-amass-millions-2018-07-02

  9. As liberals are fond of defending taxes as the price of modern civilization, so is economic inequality.

    1. Whereas conservatives are evidently fond of spending trillions of dollars on useless things for no reason and then bitching about deficits once liberals are in power.

      1. Keep the hate alive

      2. But of course. Why would one expect something different from most of the current batch of “conservatives.”

      3. As opposed to Democrats, who complain about the human and financial cost of the wars they vote to authorize, and then elect the Barack “biggest warmonger President in US history” Obama with the hopes of following him up with Hillary Clinton.

        Fuck you, Tony.

  10. we’ve increased the number of billionaires around the world

    Hooray for inflation!

  11. Progs always talk about income inequality in terms of net worth and I think its important to point out how badly social security skews that measurement. 12.4% of all us plebs’ wages over our lifetimes going into a pseudo-retirement program and it counts for jack shit for our net worth.

    Imagine if all that money had instead gone into index fund that went up with the market and WE owned it. What would the wealth distribution curve look like then?

    1. You don’t have to imagine it. All you have to do is learn the law about the income tax, and use that knowledge to get out of the SS Medicare trap, by filing educated returns, and receiving full refunds of all withheld taxes, state and federal, including payroll taxes. Then you can invest your complete refunds in those index funds. See http://www.losthorizons.com

  12. “…verbally smooth as AOC.”

    Like…Say what?

  13. “What Bernie Sanders Gets Wrong About Capitalism”

    I don’t have enough time for that. Try ‘what he gets right’.

    1. Wrong. Either way around it takes only seconds.

      “What Bernie Sanders Gets Wrong About Capitalism”

      Everything

      “What Bernie Sanders Gets Right About Capitalism”

      Error: empty set.

  14. It seems it’s okay for Bernie to write a book which nets him $845,000, but not necessarily for someone else who develops a product or service which people want, and actually profit from it. Bernie, quite obviously, is much better at politics than the average Josephine. Is it unfair of him to take advantage of poor, less-talented, people by developing that talent and utilizing it to beat them at the voting booth? Should we force him to reduce that “inequality?” Perhaps by taking 70% or more of that paycheck, and the ones yet to come, and giving to people who didn’t earn it?

    1. Now that a bunch of the dem presidential hopefuls released their tax returns to turn up their noses at trump a few outlets have combed them to see how low these folks philanthropic contributions really are. And it was hilarious. I can’t remember if it was butegeig or beto, but one responded to the criticism of only donating like 1% of his income to charity by releasing a statement saying “we are currently looking into the dissapearamce of thousands of dollars of unreported charitable donations”

  15. We won’t all end up in the same place, but most of us will be more prosperous than if government decided our limits.

    Govt DOES have a big freaking thumb on the scale ‘deciding our limits’. It’s just that we subsidize and protect those who already have. Which is why ‘socialism’ has a perverse appeal in the one country on Earth where it should have no appeal whatsoever. And why ‘liberty’ seems to be disconnected at the bottom of the ladder where it pretty obviously can have the biggest impact (see the rest of the world).

    Biggest delusion of America is that our status quo IS a free market. It ain’t. But that delusion allows ‘conservatives’ to do what they always do (defend the status quo) and link it to classical liberal or libertarian ideas.

  16. The income gap continues to widen to absurd proportions, the middle class is shrinking. It’s a big, big problem. Bernie sanders is not the answer but pretending there is not an issue is worse than Bernie

    1. Isn’t anybody going to help that poor man?

    2. “The income gap continues to widen to absurd proportions.” Well, without tempting to quantify exactly what “absurd” means, simplifying the tax code (by which I mean removing most personal income tax deductions), as well as eliminating corporate handouts, loans, grants, (all of them), and gradually moving from the current system of welfare handouts (and it’s 1/2+ trillion dollar per-year bureaucracy), towards a negative income tax, we can end poverty, as currently defined. The net would be a tax cut for the middle class (either directly or by not having to pay as many taxes passed on to them through higher prices) as well as benefiting those at the lower end of the income scale by both increasing their real income as well as giving them more autonomy over their lives.

      1. “simplifying the tax code . . ., as well as eliminating corporate handouts, loans, grants, (all of them), and gradually moving from the current system of welfare handouts. . ., towards a negative income tax, we can end poverty, as currently defined.”

        Nope, as currently defined by the government, no government program you could possibly imagine could ever end poverty.

        Why? Because the income from government transfer payments of all types are by definition excluded from all calculations of who is under the “poverty line”.

        1. Not necessarily disagreeing with you. Notice, I said, “as defined.” Using that definition, using a negative income tax, one could, for instance, double the family income of those currently living below the poverty level, as defined. But then, would those who are simply “low-income” be the new “poverty” level? Well, no doubt some people would construe that, and some politicians would no-doubt act upon it. But, at least we might get rid of a half-trillion dollar per year waste, which could be used to lower the debt. So, far from perfect, but still, perhaps, far better than what we have now.

    3. Yeap the middle class is shrinking, because they are moving into the upper class. You should really learn to us Google.

      Also, so what if there is an income gap. There are talent gaps. Hell, I think I’m average so every good looking people I should hit with a bat right?

      People have to learn to live within their means or work hard if they want something. Stop being jealous of others.

  17. If you really want true income equality, institute socialism and watch an oligarchy flourish.

    So what if someone earns 10,000 times what I do? I probably don’t have the specific skill set or aptitude that made that person so filthy rich.

  18. “Capitalism” is a marxist term and it’s use should be discouraged, especially by Libertarians. “Free market” is preferable, same number of letters but fewer syllables.

    1. Agree. But those who use the word ‘capitalism’ tend not to actually have any interest in free markets. They want a system where govt is of by and for the protection/subsidization of capital. They want cronyism. They rather like ensuring barriers to entry and the last thing they want is actual competition. And more than a few prefer a propertarian plutocracy where a social elitism/superiority can be combined with control of wealth/power.

      The worst thing that could happen to free market ideas is for those folks to stop using the word ‘capitalism’ and to switch to ‘free market’ instead. Because they are toxic and they would kill that idea by association.

      1. Crony capitalism is not a synonym for capitalism. One is not even a subset of the other. Despite the similarity of names, they are wildly different philosophies.

        1. They can readily co-exist — and usually do.

          Cronyism and free markets on the other hand CANNOT co-exist. Cronyism takes the free out of free market.

          So if you favor free markets, you must root out and eliminate cronyism. If you favor capitalism, that’s irrelevant and if it’s irrelevant to the idea then might as well get a bit for yourself eh?

  19. I apologize for not having the CATO link to income inequality, but they maintain that census data does not include many forms of income be they subsidies, tax credits , social security, medical care, etc. Even the CBO’s numbers for income are incomplete so that appearances are the perception and not reality. Low income people get cash and in kind benefits that boost their standard of living beyond the left’s claims of inequality

    1. You are correct in that assumption, I believe. What IS known, however, that we spend an average of just under $20,000 per year in tax money for those living under the poverty level. That figure is a couple of years old, so it may be a bit on the low side. Some folks may receive very little, others much more. But I have never seen a family of four on welfare who looked like they were making $80,000 per year (even given that hopelessly inefficient Medicaid takes up nearly half of it.)

  20. Our country, particularly in overcrowded places, is definitely much poorer than it was even 20 years ago, and is fast becoming an irrelevant shithole with zero accomplishments at any level.

    1. But enough about the barrios where large numbers of illegal immigrants cluster to live pretty much like they did in their home countries…

Please to post comments

Comments are closed.