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Free Minds & Free Markets

Equality Versus Liberty

One percent owns 35 percent! So what?

President Barack Obama says income inequality is "dangerous ... the defining challenge of our time." The pope is upset that capitalism causes inequality. Progressives, facing the failures of Obamacare, are eager to change the subject to America's "wealth gap."

It's true that today, the richest one percent of Americans own a third of America's wealth. One percent owns 35 percent!

But I say, so what? Progressives in the media claim that the rich get richer at the expense of the poor.

But that's a lie.

Hollywood sells the greedy-evil-capitalists-cheat-the-poor message with movies like Martin Scorsese's new film, "The Wolf of Wall Street," which portrays stock sellers as sex-crazed criminals. Years before, Oliver Stone's "Wall Street" created a creepy financier, Gordon Gekko, played by Michael Douglas, who smugly gloated, "It's a zero-sum game. Somebody wins; somebody loses."

This is how the left sees the market: a zero-sum game. If someone makes money, he took it from everyone else. The more the rich have, the less others have. It's as if the economy is a pie that's already on the table, waiting to be carved. The bigger the piece the rich take, the less that's left for everyone else. The economy is just a fight over who gets how much.

But this is absurd. Bill Gates took a huge slice of pie, but he didn't take it from me. By starting Microsoft, he baked millions of new pies. He made the rest of the world richer, too. Entrepreneurs create things.

Over the past few decades, the difference in wealth between the rich and poor has grown. This makes people uncomfortable. But why is it a problem if the poor didn't get poorer?

Progressives claim they did. Some cite government data that show middle class incomes remaining relatively stagnant. But this data is misleading, too. It leaves out all government handouts, like rent subsidies and food stamps. It leaves out benefits like company-funded health insurance and pensions, which make up increasing portions of people's pay.

And it leaves out the innovation that makes life better for both the rich and poor. Even poor people today have access to cars, food, health care, entertainment and technology that rich people lusted for a few decades ago. Ninety percent of Americans living "below the poverty line" have smart phones, cable TV and cars. Seventy percent own two cars.

But hold on, says the left. Even if the poor reap some benefits from capitalism, it's just not "fair" that rich people have so much more. I suppose this is true. But what exactly is "fair"?

Is it fair that models are so good-looking? Why is it fair that some men are so much bigger than I, so no one will pay me to play pro sports? It's hardly fair that I was born in America, a country that offers me far greater opportunities than most other countries would. We Americans should be thankful that life is not fair!

Freedom isn't fair, if fair means equal. When people are free, some will be more successful than others. Some people are smarter or just luckier. Globalization and free-market capitalism multiply the effect of smarts and luck, allowing some people to get much richer than others. So what? Inequality may seem unfair, but the alternative—government-forced equality—is worse. It leaves everyone poor.

Opportunity is much more important than equality, and there is still income mobility in America. People born poor don't necessarily stay poor.

Pew research shows 58 percent of the kids born to the poorest fifth of families rose to a higher income group. Six percent rose all the way from the bottom fifth to the top fifth.

Sixty-one percent of kids born to the richest fifth of families fell from that group, and 9 percent fell all the way to the bottom.

Opportunity requires allowing people to take risks and make changes. We won't always like the outcomes. But over the long haul, we're still better off if people are free to strive and fail, or maybe—reap big rewards.

Photo Credit: cc

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  • Francisco d Anconia||

    Have I mentioned I like Stossel?

  • CE||

    The irony is that it's the leftists who are actually greedy, as in coveting other people's stuff.

  • OldMexican||

    You know, that League of Angels advertisement is NOT safe for work. I am probably the fastest Alt-Tab key presser in all of Texas but I can get distracted sometimes, too!

  • Chase C||

    Adblock, you can give your alt-tab a rest

  • Francisco d Anconia||

    Damn good article John. This "income inequality fallacy" needs to be discredited, for the BS it is, at every opportunity. It's dangerous. It is the seed of Socialism.

  • Cyto||

    Somebody should write a book about it. They could set it in a fictional future, maybe using farm animals, and you could name the main character Harrison or something.

  • OldMexican||

    Pew research shows 58 percent of the kids born to the poorest fifth of families rose to a higher income group. Six percent rose all the way from the bottom fifth to the top fifth.


    The Left doesn't care and most boobs don't realize that people do not remain in the same spot like serfs on the baron's land, not in this country at least.

    But I say, so what? Progressives in the media claim that the rich get richer at the expense of the poor.

    But that's a lie.


    Of course it's a lie! However, many on the left still cling to two very foolish fallacies: one, that a country's wealth (a contradiction in terms as countries can't possess anything) is always fixed, making any gains by someone a loss for another, i.e. a zero-sum game; or, that even if you increase the pie, the rich exploit the poor by depriving workers from the total reward due to them for their production (the labor theory of value), a notion elegantly debunked, destroyed and left for dead by Eugen von Bohm-Bawerk.

  • CE||

    Obviously the rich don't pay their workers every cent of value they create. What would be the point? But it's still a win-win deal. The rich are better off by creating wealth for themselves. Their workers are better off by getting a better paying job than they would otherwise have, or they wouldn't accept the offer.

  • OldMexican||

    Re: CE,

    Obviously the rich don't pay their workers every cent of value they create


    Well, the workers could receive every penny they deserve if they could only wait until the product that they helped produce actually sells in the market, whenever that happens.

    What Bohm-Bawerk showed (which Marx completely ignored, either unwittingly or not) is that the workers are paid their share of the sale now at a discount rate which is the interest rate. If workers' time preference was such that they would stand with the entrepreneur shoulder-to-shouder, waiting for everybody's commission check (that is, if everybody waited patiently for the thing to sell), then they would get exactly what they put as work into the product. If they're not willing, then the workers can enjoy their pay now except at the present discount rate.

  • Sevo||

    "What Bohm-Bawerk showed (which Marx completely ignored, either unwittingly or not)"

    OM,
    I thought B-B "corrected" (demolished) Marx's theory post facto.

  • The Immaculate Trouser||

    "Inequality" is a completely worthless concern, especially in a country as large and diverse as the US. I will never meet Bill Gates -- why should I give a damn how much he makes a year, when it does not affect me? The notion that inequality is intrinsically harmful is rooted in antediluvian economics or the politics of envy. It really is that simple.

  • Loki||

    I will never meet Bill Gates -- why should I give a damn how much he makes a year, when it does not affect me?

    Not true. Odds are you typed that comment on a computer that runs a MS Windows OS. If not Windows, then an Apple OS, which of course made Steve Jobs insanely wealthy, so either way you were affected in a postive way by one of those two insanely wealthy people.

    Which is kind of the point, entrepeneurs who provide products and services that collectivist command economies such as communism or fascism could never even think of make everyone's life better. But, they get rich in the process, and that's TEH EVUL. Prog-tards would literally rather suffer through life without any of those innovations that come from entrepeneurs than put up with the existance of even one "rich" person.

  • sarcasmic||

    Prog-tards would literally rather suffer through life without any of those innovations that come from entrepeneurs than put up with the existance of even one "rich" person.

    That's not true. They want the innovations from the entrepreneurs, and they want the profits as well. They really believe that the innovators will do their thing out of patriotic duty, or that Top. Men. in government will cause those innovations to happen. These are people who honestly believe that nothing has ever been invented without government research. Not even the wheel.

  • Loki||

    Good point. Most of them aren't actually evil, just too stupid to understand the ramifications of their ideas.

    It's like this time in college when I was talking with an actual died in the wool communist. We were in his dorm room and he started on about how property rights shouldn't exist, so I got up, went to his kitchen and grabbed a bag of chips and a soda. When he protested that those were his, I looked him and said "You just said that you don't believe in property rights, so actually this isn't yours, and since I'm hungry and thirsty I just figured you'd be OK with me helping myself to some chips and soda. Y'know, since you don't own them and all." He never really talked to me much after that. I wonder why.

  • sarcasmic||

    My father believes there should be a maximum wage, as in a 100% tax on income above some arbitrary amount, and the money collected should be used to fund a minimum standard of living for everyone else. There's no way to convince him that that tax would eliminate any incentive to create any value above that number, resulting in little or no tax actually being collected and less overall wealth for society. He just figures the greedy CEOs will continue to receive their multimillion dollar salaries and give it all to the government. The guy is an ignoramus when it comes to economics, and he's not about to learn anything from a *scoff* libertarian.

  • Zeb||

    That already happens. A lot of Europeans take most of December off to avoid hitting the high income tax rate of the next bracket.

  • Drake||

    And all the other ways people try to minimize their income tax exposure - employer paid healthcare and retirement, company cars, and even moving the business elsewhere.

  • ||

    With marginal progressive income tax rates, it never happens that it doesn't worth to have more income. Only it worth less & less.

    Let's assume that there are two income tax rates: 16% up to X income, and 32% above that. Because the first X income is taxed at 16% and only the income above X gets taxed at 32%, it is worth to make more than X -- but every unit of income above X gets taxed at a double rate than below X.

  • Christophe||

    Except that people already have a point at which it's not worth their while to continue working. Progressive taxation makes that happen even earlier.

  • Jan S.||

    I got into a discussion with a liberal on Facebook just a couple of months ago where I stated I doubted very seriously if government bureaucracy was involved in the invention of the wheel, and said something along the lines of, "Human beings have been creating and inventing and building for at least 40,000 years without any help - now, all of a sudden, we need a government to do it for us?" (The discussion was over the tired old saws of "infrastructure" and "educating the children.")

    The sound of crickets was quite deafening for two or three days afterwards, when he finally came back and basically wrote that there was SO much wrong with my argument that he didn't even know where to begin, and that he hoped I enjoyed my Thanksgiving - a government sanctioned holiday.

    Like there would be no turkey and dressing without the benefices of U.S. gubmint.

  • Sevo||

    "Thanksgiving - a government sanctioned holiday."
    So you can only not work when the gov't allows it?

  • The Immaculate Trouser||

    That's a good point.In a system where the only legal interactions I can have with a person are those which are voluntary (and where all voluntary interactions are legal), it is far more likely that my association with a billionaire (or the impact he/she has on my life) will be beneficial than not.

  • CE||

    Unless they pay mercenaries to capture you and imprison you in their hunting preserve for sport.

  • Christophe||

    Well, if it's voluntary, that means you're into being hunted for sport (NTTAWWT).

  • robc||

    Im using linux, which made Torvalds upper middle class or something.

    Very indirectly, as he didnt get any cash from me. But it still works out...by creating the product he created value for himself, even though he never made a single $ directly off selling the product.

  • mtrueman||

    Didn't Torvalds work on Linux as a part of his Masters thesis at Helsinki University? An institution, by the way, dedicated to promoting and strengthening the nation state.

  • PapaSnigz||

    Im surprised more people haven't responded saying they're on linux, seems like the libertarian OS. Anyway my new year's resolution is to try out linux so wish me luck!

  • trshmnstr||

    Anyway my new year's resolution is to try out linux so wish me luck!

    Good luck! May you find yourself in Linux heaven and avoid the pitfalls of dependency hell!

  • Marian Kechlibar||

    Try openSUSE, it is quite stable and the user experience for a newbie is fine.

  • mtrueman||

    "Inequality" is a completely worthless concern"

    I thought Libertarians put great stock in the concept of 'equality of opportunity.' Do you believe that those who are concerned with equality of opportunity are economically naive and envious?

  • Jordan||

    I thought Libertarians put great stock in the concept of 'equality of opportunity.'

    That depends what "equality of opportunity" means. Equality under the law? Yes.

  • Zeb||

    Equality of opportunity only in the negative sense. No one should be arbitrarily denied an opportunity through the use of force.

    Equal rights and equality under the law are the important ones.

  • mtrueman||

    "equality under the law"

    The law? You have specific laws in mind or are you talking about 'the law' in an idealist, platonic sense divorced from the concerns of us earthlings?

    Are any two individuals said to enjoy equality of opportunity provided that there is no legal discrimination between them? Seems like a naive proposition to me. Equality of opportunity requires more than a lack of legal impediments. People have different capacities to defer gratification and plan for the future. To pretend they have equal opportunities is to ignore the findings of science. These capacities, gratification deferral and future planning, are the important ones and they determine an individual's success in life. Legal equality is relatively trivial in comparison.

    Even in countries like communist Cuba, where there is legal discrimination based on class etc, you'll find that those who are successful, and able to rise to positions of wealth and power, are those with the capacity to defer gratification and so on.

  • JPyrate||

    mtrueman. There is an immense difference between rising in wealth, and power by feeding off a dead corpse while beating down those around you, and inventing a good or service that people are willing to compensate you for.
    Would you rather have an economic system that allows some to rise, and bring others up along with them, or an economic system that encourages both the entrepreneur, and the politician into criminal behavior ?

  • mtrueman||

    My point is that the same sort of people will rise to the top in any society: those who have the ability to defer gratification and plan for the future etc. You may believe that all people are equal in this respect, but science shows otherwise.

  • trshmnstr||

    . To pretend they have equal opportunities is to ignore the findings of science. These capacities, gratification deferral and future planning, are the important ones and they determine an individual's success in life.

    Opportunity is entirely irrelevant to capacity. An infant has the opportunity to voice its opinion on matters of national security, even though it doesn't have the capacity to. I have the opportunity to self promote my art, even though I don't have the capacity to produce any art that would sell.

  • mtrueman||

    "Opportunity is entirely irrelevant to capacity"

    You should familiarize yourself with the findings of neuroscience and psychology on the relationship between ability to defer gratification and success in future life.

    I don't understand how you have the opportunity to sell something you don't produce.

  • wareagle||

    this is not equality of opportunity. It's about equality of outcome.

  • Gilbert Martin||

    "I thought Libertarians put great stock in the concept of 'equality of opportunity"

    No I would say what Libertarians put great stock in is individual freedom - including economic freedom (i.e. freedom of contract).

    Such a system will incidentally create more economic opportunities but there is no such thing as a "right" to an equality of opportunity any more than there's a "right" to an equality of outcome.

    That would be an affirmative right and there is no such thing as affirmative rights. All rights are negative liberties and all obligations are negative as well.

  • mtrueman||

    "No I would say what Libertarians put great stock in is individual freedom"

    I know that is true, but I've read in these pages over and over that libertarians favour equality of opportunity over equality of outcome. Are you disagreeing with this? I've never seen anyone here condemning the notion of equality of opportunity before now.

    I'm not sure why you refer to 'rights.'
    The original poster who said that inequality was 'a completely worthless concern' never referred to rights, and neither did I in my response. I don't see how dragging the concept of rights into the conversation is helpful or illuminating.

  • Gilbert Martin||

    "I know that is true, but I've read in these pages over and over that libertarians favour equality of opportunity over equality of outcome. Are you disagreeing with this? I've never seen anyone here condemning the notion of equality of opportunity before now"

    Having a system that incidently produces relatively more equality of opportunity is good. Interfering in individuals freedom of contract in service of a goal of providing a more "equal" opportunity to someone else is not.

    "I don't see how dragging the concept of rights into the conversation is helpful or illuminating."

    What else other than a concept of "rights" would relate to a belief that there should be an equality of opportunity?

  • Gilbert Martin||

    "Inequality" is a completely worthless concern"

    It also isn't any business of the federal government anyway.

    There is no ennumrated power delegated to the federal government in the text of the Constitution that authorizes it to be deliberately redistributing (i.e stealing) the wealth of citizens to pursue alleged "equality".

  • JWatts||

    ""Inequality" is a completely worthless concern, especially in a country as large and diverse as the US. I will never meet Bill Gates --"

    Mildly OT, but the GINI coefficient is a silly metric. If Bill Gates moved to Iceland and transferred all of his assets to Iceland. The GINI coefficient of Iceland would sky rocket and the US's coefficient would drop. However, it's quite obvious that this would be a great thing for Iceland. And yet by the GINI coefficient measure it's presented as Iceland going downhill.

  • Jim in Denver||

    When Congress can pick winners and losers ( via regulation, taxation, the awarding of contracts etc...) it is the wealthy and affluent who stand to prosper most. Everyone here knows that legislation and regulation act as a barrier to entry for new entrepreneurs. While the statistics prove that the blockade isn't a 100% effective I can't help but wonder how much those upward mobility statistics would be improved if the wealthy weren't able to affect the votes of our elected officials.

  • JPyrate||

  • Jim in Denver||

    The only vague parallel I can draw from your link is the high tariffs on "infant industries", but I wasn't discussing new industries. Barriers to entry in existing industries was my point. As you must be aware an unfortunate number of regulations are actually lobbied for by the big players of the industry to be regulated, that is a barrier to entry. The cost of compliance alone can be too burdensome let alone the cost of violating a regulation - accidental or otherwise - thus limiting competition in an existing industry.

    I'm going to go out on a limb here and state that either you didn't read my post or your replied to the wrong person as nothing I said referenced trade deficits.

    That or I am exceedingly dense today and would appreciate a hint as to the point you were attempting to make.

  • Christophe||

    I think he's pointing out how old our current predicament really is (read Origins subsection).
    Modern progressives are doing the same thing mercantilists were doing in the 18th century (covering for rent-seeking behaviour with fallacious economic reasoning).

  • JPyrate||

    Sorry Jim. that was my way of saying that I agree with you. What Christophe said. He is much articulate than I am.

  • JPyrate||

    IMO It just seems to me that laws, and regulations that favor a state approved monopoly either look like capitalism, or outright socialism.

  • CharlotteHaze||

    Exactly. The majority of people know by rumor ALONE that the very-rich even exist.

    It's beyond depressing that this "inequality crisis" jive is taken seriously by anyone over the age of twelve.

  • CE||

    San Francisco to tax Google for using city bus stops for their private buses, because of protests. But because state law says the taxes can only be used to cover the cost of services provided, and there is no incremental cost, the tax loot will only fund the private bus taxation program. As Dave Barry says, I'm not making this up.

    http://blogs.wsj.com/digits/20.....gle-buses/

    The shuttle companies would be charged $1 per stop, which the mayor’s office estimates will bring in approximately $1.6 million in total revenue for the entire pilot. That total is intentionally limited: State law limits such fees to the cost of providing a service or policy. So all of the fees will go into policing the program.

  • Christophe||

    Ouch. I thought it paid for bus stop maintenance (which is a way more reasonable use of the funds).

    The tech companies don't seem to mind. We'll see how things devolve from here.

  • zaphod||

    Brookings had an interesting article a couple days ago (using actual data!) showing that the bottom actually fared better when you consider the givebacks and tax breaks afforded to the lowest quintiles.

    http://www.brookings.edu/resea.....-burtless#

  • RightNut||

    President Barack Obama says income inequality is "dangerous ... the defining challenge of our time."

    Says the dude who just got back from a $4 Million dollar vacation to Hawaii.

  • Loki||

    A $4 million dollar tax payer funded vacation to be exact. As any good prog knows, anyone who actually makes enough to be a net tax payer as opposed to a net consumer must be an EVUL rich person. Therefore by taking that vacation at their expense he was really just sticking it to "the man."

  • Zeb||

    If I were in charge the president wouldn't be allowed out in public for anything not essential to performing the duties of the office unless he paid for all of his own security. Why should we be subsidizing these assholes' campaigning and vacations?

  • JWatts||

    Because otherwise, Obama might have stayed in Washington and tried to do something.

  • CE||

    Pew research shows 58 percent of the kids born to the poorest fifth of families rose to a higher income group. Six percent rose all the way from the bottom fifth to the top fifth.

    I'm in that six percent club. Anyone else?

  • BuSab Agent||

    Working on it. Haven't made it all the way to the top, but we're several quintiles higher up than where me and Mr. Busab Agent started.

  • Drake||

    Trying to avoid that 9% club (although my father's earnings didn't really take off until I was an adult).

  • Jan S.||

    That happens to a great many parents, Drake - I'm one of them.

  • Curtisls87||

    Moi. I have a picture somewhere of me in my crib, a set of bunk beds on either side. We five kids had one room and my parents the other in a tract house they rented, while scraping by. Now, I live in Silicon Valley and am fortunate to make a good income, which this state promptly taxes the hell out of.

  • Old Dave||

    Very nice article, John. Thank you.

  • Nick M||

    Every time a politician brings up income inequality, why isn't the response to immediately ask them to donate all they have to charity?

  • sarcasmic||

    When someone speaks of equality it usually means "What's mine is mine and what's yours is mine."

  • Drake||

    Just ask the politicians how much s/he makes. Most make far above average. Demand half the difference for your vote.

  • mr simple||

    But what exactly is "fair"?

    That's easy. It means the ball was hit between the two lines that run from home plate through first and third bases, respectively.

  • Brian||

    No, no, no. Progressives are just suffering from a typo. See, watch this:

    It's as if the economy federal budget is a pie that's already on the table, waiting to be carved. The bigger the piece the rich anyone takes, the less that's left for everyone else. The economy feerl budget is just a fight over who gets how much.

    See? Now it is exactly an accurate description of what happens. The government really is a zero-sum game.

  • Brian||

    *feerl = federal

  • ReganT||

    FYI--we would have also accepted "feral."

  • JWatts||

    I personally would have preferred feral.

  • Bill||

    Whenever people tell me the gap between rich and poor is getting
    bigger over the last 50 or 80 years I ask them if there is more or
    less government now than there was 50 or 80 years ago. Or 5 for
    that matter.

    I too am always flabbergasted when people talk about the poor
    and then don't want to count the billions in aid that they get.

  • swampfaye||

    "You know, I used to think it was awful that life was so unfair. Then I thought, wouldn't it be much worse if life were fair, and all the terrible things that happen to us come because we actually deserve them? So, now I take great comfort in the general hostility and unfairness of the universe."
    Marcus Cole to Dr. Franklin, A Late Delivery from Avalon

  • XM||

    "The rich are getting richer, the poor are getting poorer!"

    Uses credit card to buy PS4 and the latest Iphone that no one really needs.

    America - the land where the poor are afforded artificial purchasing power to make the rich richer.

  • Freddy B||

    The dirty little secret that Liberals don't like to discuss: The combination of work and capital in the production of goods and services is the 'economy'.

    Progressives instead sell many different definitions to a simple concept: They sell zero-sum pie that Stossell references, they conflate government spending with economic activity, and they confuse people into believing currency is wealth. The stew of confusing ideas progressives promote is all to the purpose of obscuring how simple, effective, and prosperous a free market 'economy' actually is.

  • OptimistCrank||

    Nearly 3/4 (274) of this year's Forbes 400 richest Americans built their wealth during their lifetime - some from rather difficult circumstances (e.g. Larry Ellison & Howard Schultz). One can wait for opportunity, or one can create it

  • Eggs Benedict Cumberbund||

    Productivity gains have meant that today's poor have a standard of living roughly equivalent to the middle class of the 60's. In some ways they have it better cause they have products that are better than the 60's equivalents (cars, TV's, etc.) and they have products that didn't exist in the 60's (cell phones, computers, inter net, etc.). Also most every commodity item is cheaper in terms of hours worked than it was even 10 years ago...except for cars. A lb of chicken or an hour of light is vanishingly cheaper now that it was 20+ plus years ago.

    So since the poor live a relatively decent material life style, what is the actual beef with inequality of incomes/wealth? Is it a class based envy? The product of free shit raining down on the poor since the Great Society was hoisted upon us? Or maybe just mis-direction by Team Blue?

  • NotAnotherSkippy||

    "Is it a class based envy?"

    Yes.

    "Or maybe just mis-direction by Team Blue?"

    Yes.

  • The Knarf Yenrab||

    http://www.youtube.com/watch?v=rv5t6rC6yvg

    Reason should just embed that video into every inequality article.

    But this is absurd. Bill Gates took a huge slice of pie, but he didn't take it from me. By starting Microsoft, he baked millions of new pies. He made the rest of the world richer, too. Entrepreneurs create things.

    That's well put, and like so many other truths of economics and its intersection with public policy, it's a simple enough concept for a third grader to grasp. When the popular labor-theory assumption that Henry Ford stole his employees' wealth still exists in the 21st century, it's a sure sign of the nation's failure to provide its citizens with a basic education in economics & psychology.

  • The Saj||

    It's true that today, the richest one percent of Americans own a third of America's wealth. One percent owns 35 percent! But I say, so what?

    See here we disagree, because in 20 years, they'll own 48%. In 40 years, they'll own 63%. In a 100 years they will own 90%+ and we will have restored the feudal system and serfdom.

    "Progressives in the media claim that the rich get richer at the expense of the poor."

    No, they get richer at the expense of the working and middle class.

  • The Saj||

    "By starting Microsoft, he baked millions of new pies."

    Problem is, that most of the new pies...are made using replicators. Huh what? Well, you no longer need a farmer to grow the eggs, milk, butter or wheat, nor the mill to grind it to flour. Nor the mine and blacksmith for the pie tin. It's just replicated from raw energy. Well, not quite. But the point is that a billion dollar company today may employee a few hundred individuals rather than thousands.

    "But why is it a problem if the poor didn't get poorer?" Because the middle and working classes got poorer. While the wealthy gained enormous amounts of wealth during an economic collapse. Truly, the wealthy should have lost a similar portion of their wealth, at best break even, but surely not amass far more.

  • The Knarf Yenrab||

    Problem is, that most of the new pies...are made using replicators. Huh what? Well, you no longer need a farmer to grow the eggs, milk, butter or wheat, nor the mill to grind it to flour. Nor the mine and blacksmith for the pie tin. It's just replicated from raw energy. Well, not quite. But the point is that a billion dollar company today may employee a few hundred individuals rather than thousands.

    Efficiency of labor is a good thing.

    If you could reduce the number of farmers needed to grow the world's food to one and free every other laborer to meet other human needs and desires, why wouldn't you do that?

  • NotAnotherSkippy||

    When you come up with a device for direct conversion of energy into matter your Nobel and riches await you. The middle and working classes did NOT get poorer.

  • The Saj||

    "It leaves out benefits like company-funded health insurance and pensions, which make up increasing portions of people's pay."

    Sorry, what world are we living in? "increasing portions of people's pay", really, cause I know very few who are still getting jobs with pensions. Health insurance....yes, those costs have sky-rocketed. But I've noticed that over the past decade my insurance quality has degraded. I went from $10/copays to $30/copays. Zero deductibles to hundreds and thousands of dollars worth of deductibles. From free health insurance to a hundreds of dollars for me and thousands to insure my family.

    So it's safe to say that company's did take a bit of a hit with health insurance premium hikes. But much of that hit was passed on directly to the employee as increased costs, and decreased service quality.

  • NotAnotherSkippy||

    You're an idiot. OK, now that we've got that out of the way let's address your specific ignorance:

    "Pensions" include defined contribution plans. What do we call these? How about 401k's and 403b's? Have you perhaps heard of them?

    Health insurance: You can thank Medicare and gov't intervention for much of that health cost increase. Europe kills grandma. We keep her alive for the last week of life and spend $2MM on it. You can also thank your progressive friends in Europe and Canada who freeload off of US and medical device research. How do they do that? Well, they impose price controls. Since the US does not we effectively pick up the R&D tab for much of the world's medicine.

  • Sevo||

    ..."You can also thank your progressive friends in Europe and Canada who freeload off of US and medical device research. How do they do that? Well, they impose price controls. Since the US does not we effectively pick up the R&D tab for much of the world's medicine."

    You can thank the same hypocrites for the market prices those rich folks in 3rd world countries pay for meds for the same reason; Euro twits don't want to pay what it costs and transfer the excess to those who can least afford it.
    Eurotrash are so CARING!

  • Marian Kechlibar||

    "Europe kills grandma. We keep her alive for the last week of life and spend $2MM on it."

    Which one is better? I don't really see it.

  • The Saj||

    " I suppose this is true. But what exactly is "fair"?"

    Fair is a simple tax system. One which doesn't have thousands of loopholes, and allow those with millions to pay lower tax rates

    10% General Fund
    10% Social Tax

    A single deduction per person based on Min. Wage * 40 hours * 52 week.(1/4 for a dependant.)

    And yes, i feel we need some corrective action to fix the past several decades. So I'd add the following:

    10% Wealth Tax (applied only when there is a national debt, deficit or times of war).

    10% Salary Cap Penalty Tax (if an executive earns more than a 100x the salary of the lowest worker, then they are hit with a penalty tax).

    This will a) encourage our nation to balance our books, and b) encourage CEOs to raise up all employees of companies, not just theirselves.

    Do the latter two kind of go against libertarianism. A little, but only in the fact that we have such need of corrective action. And in regards to their breech, it is far far far less than the breech we have today full of numerous loopholes.

  • Christophe||

    Salary Cap Penalty Tax: You really think the effect would be to give raises to the janitors and office clerks? Ha!

    High level executives have compensation that is largely stock options, precisely to avoid tax rules of this nature. If you want to include all compensation, watch as former employees suddenly turn into stand-alone subcontracting corporations. What are you going to do then.

    The above is if you're lucky. Certain corporations will find it much cheaper to subcontract out all of their low level jobs to temp companies (avoiding the cap), or worse, just automate the lowest paying jobs. That sure will help the most vulnerable people in our economy!

    What are you smoking?

  • JPyrate||

    Why not just use a flat tax ? At least it is transparent theft.

  • BLEEDINELL||

    Mr. Marx, is that you?

  • The Saj||

    "Inequality may seem unfair, but the alternative—government-forced equality—is worse."

    You seem to forget that we have government forced inequality. Through the tax system, etc.


    "But over the long haul, we're still better off if people are free to strive and fail"

    But we're not, the patent system, prevents us from doing so. If i have an idea for a better cell phone. There is no way I can compete. There is no way for me to compete in so many areas thanks to patents. Which are owned primarily by big corporations and the elite.

    And when a little guy's got a patent, even a very clear one. They almost never get a fair shake. The company that came up with the optical mouse technology. Microsoft stole it. Was sued. Lost. The inventing company received a million dollar settlement. While Microsoft made tons of millions off their sales.

  • NotAnotherSkippy||

    Yes, the tax system actively discourages work and investment at the top and bottom of the income distribution.

    If you have a better idea for a cell phone then file a fucking patent. THAT is what the patent system is for, moron.

  • JPyrate||

    Take Heart Shipmate. For every one of us that falls a million comes to steal it back. ARRRR !!!!

  • Sevo||

    "The company that came up with the optical mouse technology. Microsoft stole it."
    Cite missing.

  • Eggs Benedict Cumberbund||

    they get richer at the expense of the working and middle class.

    What? How so? Because they don't pay the working and middle class fair wages agreed to by both parties?

  • Eric Bana||

    Federal and state anti-poverty programs come to $927 billion per year. If you divide that among the poorest 15% of the U.S. population (about 46.5 million people), that's just under $20,000 per person. This doesn't even include Social Security, Medicare, unemployment insurance, or worker's compensation.

    Exactly how much more spending and taxes are supposed to eliminate poverty?

  • GlobalPoliticalAwakening||

    First, the choice is not between Capitalism and Communism. It never has been; it's an egregious false dichotomy employed by the right wing controlled media and the conservative corporate welfare state. Second, economic systems must be designed to serve people, not the other way around. Third, the only worthwhile economic ideology is one of compassion for the other and environmental sustainability, neither of which is possible under the present economic order of corporatism. Fourth, economists would have us believe that economics is independent of societal concerns and the common good. A simple analogy of why this independence is nonsense would be the example of organized crime such as drug gangs and cartels. They spend their ill-gotten gains on houses, cars, clothes, entertainment and so on. The money spent trickles down through the economy, so one could argue that their activities benefit society. But does anyone other than supply side neo-conservative ideologues believe that? Anyone who really believes that economics is independent of moral and social concerns has to believe that the ends justify the means. It's a morally bankrupt economic theology. http://www.skeptic.ca/Economic_Malaise.htm

  • Libertarius||

    You had me LOLing at "rightwing-controlled media".

    That's not even a nice job of projection. It is leftist-collectivist-statist Keynesian economics which have been ruining this country for nearly a century.

    Don't bother trying again.

  • Sevo||

    And I'm sure you noticed the claim that econ systems 'must be designed'.
    All those 'designed' econs work sooooooo well, doncha know!

  • Sevo||

    GPA,
    You're full of shit.

  • JPyrate||

    The flaw in your narrative is that human beings will always desire affordable goods, services, and status symbols. Nothing is ever going to change that no matter how hard you can try.
    The low wage worker, and the criminal underclass do not give a flying fornication what you think.
    We want what you want.
    http://www.youtube.com/watch?v=tAUAA8jkF4k

  • Marian Kechlibar||

    "economic systems must be designed to serve people"

    Every economic system serves people. Cats, dogs and aliens do not buy and sell anything.

    "economics is independent of moral and social concerns"

    Scarcity as a phenomenon is definitely independent of moral and social concerns. It is even independent of existence of mankind as such. Gold is no less scarce on Mars than on Earth.

  • montana mike||

    This fucktard thought he had fluffpo on teh browsierre.

  • Libertarius||

    The leftoids are transparently stupid and contradictory.

    Diversity or equality, leftoids? You can't have both.

    Or does this "inconvenient truth" necessitate a new rationalization? How about something along the line of "We'll have gray, stagnant equality in the realm of economics, but everywhere else we will dictate diversity in such superficial matters as race, tattoos, piercings, quirky clothing, etc."

  • GlobalPoliticalAwakening||

    If John Stossel was truly interested in educating people, he would have written something about corporatism instead of extoling the virtues of a non-existent capitalism. Right now, there is a lot of talk about the evils of “capitalism”. But it is not really accurate to say that we live in a capitalist system. Rather, what we have in the United States today, and what most of the world is living under, is much more accurately described as “corporatism”. Under corporatism, most wealth and power is concentrated in the hands of giant corporations and big government is used as a tool by these corporations to consolidate wealth and power even further. In a corporatist system, the wealth and power of individuals and small businesses is dwarfed by the overwhelming dominance of the corporations. Eventually, the corporations end up owning almost everything and they end up dominating nearly every aspect of society. As you will see below, this very accurately describes the United States of America today. Corporatism is killing this country, and it is not what our founding fathers intended. http://endoftheamericandream.c.....hould-know

  • JPyrate||

    http://en.wikipedia.org/wiki/Mercantilism

    Mercantilism is not free market capitalism.

  • GlobalPoliticalAwakening||

    Equality is about equal conditions for progress applying to everyone. We can debate if there are ways to fine tune the system, but the basic premise of needing to establish a level playing field should not have to be defended. Equality is a necessary “self-evident” good in society, as Jefferson said in the Declaration of Independence.

    Since government sets the rules that create the conditions we live under as we pursue our happiness, government is responsible to establish Equality in a democracy. Equality is a necessary good. A healthy society requires it. But, it is not an unlimited good. At some point, a government’s intervention to create fair conditions in society will eventually infringe on the ability of some to rise on their own merit. Equality, in the extreme, infringes on individual Liberty.

    To say government is the problem in all circumstances is to fundamentally misunderstand the essential role government has in establishing equality. So, on the one hand, we must have a social contract that provides for equal opportunity and access to resources. But, on the other hand, we must be sensitive to government intrusion beyond what is healthy. http://www.johnwoodall.net/tag.....z2prhEz5mU

  • Sevo||

    "To say government is the problem in all circumstances is to fundamentally misunderstand the essential role government has in establishing equality."
    The government does NOT establish equal opportunity; it defends it from distortion by force. Or should do so.

    "So, on the one hand, we must have a social contract that provides for equal opportunity and access to resources."
    No, "we" don't. I signed nothing which provides you with access to resources.

    "But, on the other hand, we must be sensitive to government intrusion beyond what is healthy."
    Well, you've finally hit on something here.

  • Sevo||

    BTW, GPA:
    "Third, the only worthwhile economic ideology is one of compassion for the other and environmental sustainability,"

    I'm gonna venture a guess that you actually fancy yourself bright enough to select an "economic ideology" such as to insure "environmental sustainability".
    If so, you've just proven yourself to be an imbecilic follower of fads.

  • Eggs Benedict Cumberbund||

    These sorts of arguments always puzzle me. Educated Progs (not GPA as he is clearly a clueless shit stain) can understand emergent behavior or self organization of complex systems that usually result in optimal behavior for said system in a biological context. However, they go all dumb shit completely forgetting that aggregating individual decisions by rational actors in a market will also optimize price/distribution of a scarce resource.

    Why is that I wonder? Maybe they don't really understand the concept in the first place? Religion trumps reason?

  • Sevo||

    "Why is that I wonder? Maybe they don't really understand the concept in the first place? Religion trumps reason?"

    My puzzlement also.
    There's no doubt some are simply wedded to the fantasy of 'equality' that they will entertain no disagreement to some 'planned' route to that end, regardless of the obvious historical failures and tragedies.
    But not all proggies are ignoramuses; why that obvious analogy scares hell out of them is a mystery to me.

  • Marian Kechlibar||

    "equal conditions for progress applying to everyone"

    Can't you see that this is absolutely impossible? Humans aren't fungible. They are born fundamentally unequal when it comes to health and innate talent, and no amount of coercive intervention can level this.

  • BLEEDINELL||

    Equality has been the catchword for every demagogue and dictator in history.

  • JPyrate||

    Equality is a necessary good.

    I eat the flesh of animals, and plants. There is no equality there.

    social contract

    I do not care about your social contract. I do what I do in order to survive, and seek comfort.

    Since government sets the rules that create the conditions we live under as we pursue our happiness

    Government does not set the rules under a Republic. It is a public affair. Individual rights set the rules.

    I'm a pirate. =)

  • Sevo||

    It's obvious that GPA is dropping this guano with no intent to defend the claims.
    Pretty sure this qualifies as a classic definition of a "troll".

  • ||

    Stossel is omitting the benefits involvement in the economy with respect to its purchase size and regulations it enforces. If Corporation A gets the contract to provide x Corporation B and so forth will have to be paying their competition through taxation. The regulatory example would be the FDA preventing drugs from being on the market that may be cheaper and more suited than those that are approved. Those two actions, as well as others, negatively impact a honest competitive market.
    Us middle class folks need to be a great deal less regulated and taxed.
    I'm surprised at Stossel for missing those benefits to the wealthy by 'force.' We have a very limited freedom in some aspects of our lives.

  • Sevo||

    ..."If Corporation A gets the contract to provide x Corporation B and so forth will have to be paying their competition through taxation."...

    So if I award Corp A a contract to provide widgets to Sevo Corp, Corp B is doing what?
    I think you're confused.

  • montana mike||

    This much is clear.

  • LifeStrategies||

    Obama might be more believable about wanting to decrease inequality if he had not increased his own wealth substantially during his terms in the Senate and then the White House. http://www.therichest.com/cele.....net-worth/ says he's now worth $11.8 million dollars - a millionaire many times over.

  • PatrickHenry||

    Of course Zero is not believable to anyone but his core leftist supporters but I sense you are unhappy that you are not also rich.

  • Brian_N_Cols_OH||

    So, I generally agree with John, but I am troubled with the attitude that the "gap" doesn't matter. Yes, factually speaking, everybody's position is being increased by these entrepreneurs. However, no matter how you tell the story, there is an issue of the psyche that is created when there is that big of a gap.

    When we look at socialism and Marxism, we see that the philosophies kill the spirit of the people. I see the same potential issue with Capitalism. No matter how you paint the picture, it creates resentment when people makes thousands of times more money than someone else. Are those people thousands of times smarter and thousands of times harder working? Have they provided thousands of times more value?

    I'm happily middle-upper class, but I see friends of mine who are no smarter than I, work no harder than I yet makes multiples of my salary. So, naturally it creates some resentment. I'm not proud of my resentment and no, I don't believe life should be fair, but it's a natural feeling that is difficult to combat.

    So, are we headed towards a breaking point? I know that Crony Capitalism has helped us get there. But, I fear that no matter how we tell the story, that the inequality is only going to get to a certain point before people's natural anger and resentment create a backlash.

  • Marian Kechlibar||

    People aren't solitary cats, but tribal monkeys, and they are overly sensitive to their own perception of relative worth.

    This is probably why libertarianism will never be a major ideology; it requires a "leave-me-alone" mindset which is an evolutionary exception in typical Homo sapiens mental equipment.

  • PatrickHenry||

    What gap? Class warfare lie 1: The bottom are worse off because the rich are better off. Fact: Incomes and living standards for all Americans, including those in lower-income brackets, are up. At the same time, tax burdens for those in lower-income groups have fallen substantially. Class warfare lie 2: rich not paying fair share of taxes. Fact: higher income taxpayers pay a considerably larger share of the tax burden than their share of personal income. Class warfare lie 3: U.S. tax system is less progressive than other countries. Fact: According to the OEDC, the US "collects the largest share of taxes from the richest 10% of the population." If the U.S. spent and taxed like France and Sweden, it would hardly affect the top 10%, who would pay about what they pay now, but the bottom 90% would see their taxes double.

  • montana mike||

    Never let the facts get in the way of a progtard narrative, just like they ignore the fact a beer cost 10 bucks in Swedish bar 30 years ago when a buddy went over as a Husqvarna dealer, thanks to taxes and morality trolls there.So yeah the middle class are being hosed, these idiots don't think it will happen here.

  • Sevo||

    ..."but it's a natural feeling that is difficult to combat."...

    Sometimes I see a really nifty blonde walking down the street and I think it would be great to grab her and have some great sex right here and now.
    It's a natural feeling that is difficult to combat, and part of being civilized is doing so.
    And it we're 'headed for a breaking point' on that issue, well, we can just admit civilization didn't work, can't we?

  • montana mike||

    That's your envy problem, bucko, you are fucking pathetic.

  • PaulinePhelpsmee||

    up to I saw the check of $8495, I did not believe ...that...my best friend actualy earning money part time from their computer.. there friend brother started doing this 4 only fourteen months and as of now cleared the dept on there appartment and got a top of the range Ariel Atom. website here
    ++++++++++++++++++++++++++++
    http://www.tec30.com
    ++++++++++++++++++++++++++++

  • PatrickHenry||

    There is only one way you could make that kind of money Pauline. Pauline, you should be ashamed of yourself.

  • jhonmary||

    Start working at home with GOOGLE!YAHOO. ABCNEWS AND MORE GLOBAL SITES... It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour.for a work detail go to home tab.... I work through this link,

    WWW.CASH46.COM

  • cheap kits||

    The Left doesn't care and most boobs don't realize that people do not remain in the same spot like serfs on the baron's land, not in this country at least.What Bohm-Bawerk showed (which Marx completely ignored, either unwittingly or not) is that the workers are paid their share of the sale now at a discount rate which is the interest rate.

  • TheBigCat||

    Really? Go back and read Rawls' "Theory of Justice" again. Shoot, take a peek at Robert Nozick's "Anarchy, State, and Utopia" as well.

  • guga duduchava||

    it may sounds rude, but i haven't read such a bullshit for so long, such a misinterpretation and overdoing, simplification of different ideas and comments which is real about the problem which is called inequality. it's a serious problem and requires contingency approach. it's a shame that authors like this are claiming being best-sellers.

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