Saturday, 1 February 2014

Income inequality

Joe Carter has written a useful article about income equality that I think Christians from both sides of the political spectrum it should read.

Carter's points
  1. Incomes are measured in money—and money is not wealth.
  2. The existence of income inequality is generally a sign of a fair distribution of incomes.
  3. Both low and high rates of income inequality can be signs of unfairness.
  4. Income inequality is not the same as economic inequality
  5. Measures of income inequality are meaningless because incomes are not zero-sum
  6. Income inequality and poverty are separate issues.
  7. No one in America is really concerned about absolute income inequality.
  8. Discussions of income inequality are almost always about redistribution of income.
  9. The only real threat caused by income inequality are problems caused by envy
  10. The focus on income inequality is at best, useless, and, at worst, immoral.
A few thoughts from myself
  1. Note that the essay is about income inequality and not poverty.
  2. One can be concerned about poverty but not income inequality.
  3. It makes a difference if your money is a result of creating wealth or just taking it, especially if you take it directly from the poor. This may include aspects of the finance industry.

What Every Christian Should Know About Income Inequality

Here are ten points about income inequality that every Christian should understand:

1. Incomes are measured in money — and money is not wealth.

Income inequality is not in itself an economic problem. The simplest way to illustrate this point is to provide a simple “solution”, for there is a simple method that would lead to perfect income equality.

The first step is to calculate the number of earners and rank their incomes from lowest to highest. For example, let’s say a country has 100 million workers, with the lowest workers paid $10,000 a year and the highest earning an annual salary of $1 million a year.

The second step would be for the government to print enough money to equalize all the incomes. For instance, a worker who was making $10,000 a year would get a check from the government for $990,000 while the person making $1 million would get no check at all. Everyone else would get a check for the difference between their income and $1 million dollars.

The result is that all 100 million workers would then have an income of $1 million – the problem of income inequality would be solved!

If that seems a bit too easy, it’s because (a) income inequality is not in itself an economic problem, and (b) incomes are measured in money, and money is not wealth. A country’s primary economic goal is not to make sure everyone has an equal amount of money, but to improve people’s standards of living.

“The money itself is not wealth,” says Don Boudreaux, “Otherwise the government could make us all rich just by printing more of it. From the standpoint of a society as a whole, money is just an artificial device to give us incentives to produce real things — goods and services.”

The rest here.

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