The Liberal Left hates Individual Freedom

Here is a great article on how we all benefit from innovation and invention - that is why individual freedom is the most important factor in producing wealth for all of us - this is how we all move from income class to another.

Those that can't see a future will not prosper - it is not any one eles's responsibility to make sure everyone has a bright future. As the saying goes, the poor and the weak will always be with us.

The liberal, of course, see this as an opportunity to take from the productive and give to the unproductive, make a whole class of individuals dependent. Marxist socialism at it best.


Is Inequality a Useful Measure of Prosperity?

By Josh Hendrickson

Dani Rodrik recently claimed on his blog that market fundamentalists view "recent trends in wealth and income inequality through pink eye glasses."Similarly, Paul Krugman has written an entire book on inequality and even claims there has been a return to the Gilded Age. These claims are clearly lacking as they are framed through a false dilemma and are predicated on a weak measure of prosperity.

Those who are concerned with income inequality often present their argumentas though there are two choices. One can either side with the market fundamentalists whose "blind faith" claims that the market will work itself out or they can side with "realists" who believe government intervention is necessary to correct for this market failure.

However, this is a false dilemma. As Arnold Kling so eloquently explained, there are many of us who concede that markets fail, but we are much more concerned with government failure. And there is certainly reason to believe that the government will fail to equalize economic outcomes. For example, the most frequent solution to income inequality, and the one advocated by Krugman in nearly every interview about his book, is higher taxes on those at the top of the income scale. While this may give the appearance of lessening inequality, in actuality it does very little. Essentially, it is equivalent to twisting the ankle of the fastest runner in the world in an attempt to make other runners faster.

In no way does this make other runners faster. Even looking beyond the likelihood of government failure, there is a far more important reason for lacking trepidation about income inequality. First, income inequality is a static measure of well-being. Looking at an individual's or group's share of income at a given point in time tells us very little. In fact, even looking at the trends in income inequality is futile.

The fact that individual's rarely remain in the same income group throughout their lives suggests that looking at a group defined as "poor"or "middle class" or "rich" is irrelevant. Second, and perhaps most importantly, is the simple fact is that income inequality is a poor measure of prosperity. In reality, economic growth and innovation will do more to help the poor and the middle class than any conceivable government policy. In Capitalism, Socialism, and Democracy, Joseph Schumpeter discusses the benefits of capitalism at long length.

Perhaps his most important argument is the one in which he explains why invention and innovation benefit those with lower incomes a great deal more than those who are rich. He points out that, "it is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as rule improvements that would mean much to the rich man." Imagine, for example, washing clothes without a washing machine. To whom did the washing machine benefit more? It was the individuals who could not hire others to wash their clothes. Unfortunately, Schumpeter's message seems to have fallen on deaf ears among the supposed market realists.

They have become too focused on imperfect measures of prosperity and, to make matters worse, they advocate policies that merely propose an aesthetic solution. Those of us with "pink eyeglasses" are not necessarily market fundamentalists; we merely recognize the fact that there are better measures of prosperity and that there is more to fear from the government than from markets.

Josh Hendrickson teaches economics at Wayne State University. He also maintains the blog entitled, "The Everday Economist."