How Market Freedom Combats Economic Inequality
For many, income inequality is a disease ravaging the fabric of capitalist societies. Therefore, curing this ailment, according to progressives, necessitates an injection of welfare benefits and higher taxes on the wealthy. Guided by a zero-sum outlook, critics believe that the success of the affluent is gained at the expense of the poor. To remind voters that he takes income inequality seriously, during his presidential campaign, Joe Biden expressed concern that the intensity of income inequality in the US would foment discord. “When we have income inequality as large as we have in the United States, today it brews and ferments political discord and basic revolutions, “he said.
Fast-forward to 2021, and the polarizing rhetoric of income inequality is even resonating with Republican voters who agree with President Biden’s measures to redistribute income in the United States. To counter the narrative of anti–income inequality crusaders, thinkers on the right point to studies showing income inequality does not impede social mobility or remark that government reports underestimate the value of cash transfers. Likewise, a popular retort is to suggest that unlike the Consumer Price Index based on surveys, the personal consumption index deflator accurately accounts for welfare payments and tax benefits.
Another counterargument to the income inequality canard is to aver that when discussing income inequality, we are rarely talking about the same people across time and space. For instance, people in the top 20 percent of wealth in 2010 may not be made up of the same people it was in 1990. However, the validity of these objections fails to sway those smitten by the allure of income inequality. Conservative talking points asserting that social and economic conditions are improving in the United States are unli
Article from Mises Wire