Income inequality is fair

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A core Tea Party value is "free markets." Walter E. Williams and Thomas Sowell are two economists who are able to make complicated subjects accessible to Everyman. In his column today, Mr. Williams explains why capitalism is not a zero-sum game:

Some Americans have much higher income and wealth than others. Former President Barack Obama explained, "I do think at a certain point you've made enough money." An adviser to Rep. Alexandria Ocasio-Cortez who has a Twitter account called "Every Billionaire Is A Policy Failure" tweeted, "My goal for this year is to get a moderator to ask 'Is it morally appropriate for anyone to be a billionaire?'" Democratic presidential hopeful Sen. Elizabeth Warren, in calling for a wealth tax, complained, "The rich and powerful are taking so much for themselves and leaving so little for everyone else."

These people would have an argument if there were piles of money on the ground called income, with billionaires and millionaires surreptitiously getting to those piles first and taking their unfair shares. In that case, corrective public policy would require a redistribution of the income, wherein the ill-gotten gains of the few would be taken and returned to their rightful owners. The same could be said if there were a dealer of dollars who — because of his being a racist, sexist, multi-nationalist and maybe a Republican — didn't deal the dollars fairly. If he dealt millions to some and mere crumbs to others, decent public policy would demand a re-dealing of the dollars, or what some call income redistribution.

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A system that requires that one serve his fellow man to have a claim on what he produces is far more moral than a system without such a requirement. For example, Congress can tell me, "Williams, you don't have to get out in that hot sun to mow a lawn to have a claim on what your fellow man produces. Just vote for me, and through the tax code, I will take some of what your fellow man produces and give it to you."

Let's look at a few multibillionaires to see whether they have served their fellow man well. Bill Gates, co-founder of Microsoft, with a net worth over $90 billion, is the second-richest person in the world. He didn't acquire that wealth through violence. Millions of people around the world voluntarily plunked down money to buy Microsoft products. That explains the great wealth of people such as Gates. They discovered what their fellow man wanted and didn't have, and they found out ways to effectively produce it. Their fellow man voluntarily gave them dollars. If Gates and others had followed President Obama's advice that "at a certain point" they'd "made enough money" and shut down their companies when they had earned their first billion or two, mankind wouldn't have most of the technological development we enjoy today.

. . .

The only people who benefit from class warfare are politicians and the elite; they get our money and control our lives. 

Say what you like about Bill Gates; Mr. Williams has a point. The full article is here. 

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Election issues 101

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Thomas Sowell is one of my favorite columnists, not the least because of his ability to explain economics in ways that anyone can understand. He writes in plain English, marshals his facts, and it’s all but impossible to find a logic lapse in any of his arguments. While I may disagree with him on this or that, I admire him and respect his opinion. Always. So I am extracting his column from a recent Front Page column on “Essential Reads For The 2016 Election:  Books every American should be familiar with before voting this November”:

If you are concerned about issues involved when some people want to expand the welfare state and others want to contract it, then one of the most relevant and insightful books is "Life at the Bottom" by Theodore Dalrymple. It was not written this year and is not even about the United States, much less our current presidential or other candidates.

What makes "Life at the Bottom" especially relevant and valuable is that it is about the actual consequences of the welfare state in England — which are remarkably similar to the consequences in the United States.

Many Americans may find it easier to think straight about what happens, when it is in a country where the welfare recipients are overwhelmingly whites, so that their behavior cannot be explained away by "a legacy of slavery" or "institutional racism," or other such evasions of facts in the United States.

As Dr. Dalrymple says: "It will come as a surprise to American readers, perhaps, to learn that the majority of the British underclass is white, and that it demonstrates all the same social pathology as the black underclass in America — for very similar reasons, of course." That reason is the welfare state, and the attitudes and behavior it promotes and subsidizes.

Another and very different example of the welfare state's actual consequences is "The New Trail of Tears" by Naomi Schaefer Riley. It is a painful but eye-opening account of life on American Indian reservations.

People on those reservations have been taken care of by the federal government for more than a hundred years. They have lived in a welfare state longer than any other minority in America. What have been the consequences?

One consequence is that they have lower incomes than any other minority — including other American Indians, who do not live on reservations, and who are doing far better on their own.

The economic plight of people on the reservations is by no means the worst of it. The social problems are heart-breaking. As just one example, the leading cause of death, among American Indian boys from 10 to 14 years of age, is suicide.

As regards black Americans, there is much talk about the role of police. If you want a book that cuts through the rhetoric and confusion, and deals with hard facts, then "The War on Cops" by Heather Mac Donald does precisely that.

On racial issues in general, the best economic survey is "Race and Economics" by Professor Walter Williams of George Mason University. Just the table on page 35, showing unemployment rates among black and white teenagers, going all the way back to 1948, should demolish all the rhetoric and spin that tries to conceal the deadly effects of minimum wage laws on unemployment among black teenagers.

The rest of Sowell's column is here. The authors cited by Sowell are also regular contributors to print and online sources. So if book-length discussions are too time-consuming for a busy schedule, you can access columns by Dalrymple on welfare and poverty here, Williams on the consequences of minimum wages here, and McDonald on the war on cops here. And here’s a review of McDonald’s book on cops. 

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