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Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
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What’s Wrong with Inequality?

by

Democratic Party presidential candidates Bernie Sanders and Hillary Clinton have brought the issue of inequality of wealth to the forefront of national debate. That’s a good thing because it enables the American people to confront the issue and, hopefully, to recognize the deeply ugly and immoral aspects of the controversy.

What difference does it make that some people are wealthier than other people? It certainly shouldn’t make any difference to Christians and Jews. The Ten Commandments command them to not covet their neighbor’s goods. Yet, when one laments the fact that somebody else has more money than others, he is guilty of violating this grave sin. It just shouldn’t matter that some people have more money than other people.

Now, that’s not to say that the manner in which people acquire their wealth doesn’t matter. It does. If for example, a person robs another person of his money, we would condemn that. But the reason we would condemn it is not because the robber has more money than before. We would condemn it because theft is wrong.

In fact, that’s another commandment that should matter to Christians and Jews — Thou shalt not steal. There are lots of people who acquire wealth — in some cases, lots of wealth — from the welfare-warfare state or the corporatist state, which necessarily entails the government’s forcibly taking the money from whom it belongs to give it to welfare-warfare state recipients. Think of the building contractors who make their money building public-housing projects. Or contractors who make their money doing studies or manufacturing bombs for the national-security establishment. Or corporations that rely on federal grants or bailouts. Or bureaucrats drawing generous salaries for working within the welfare-warfare bureaucracy. There are hundreds of thousands of Americans feeding at the public trough.

All of that should be condemned but not because such people might have more money than others but simply because it’s wrong to plunder and loot people, both through private thievery and the public thievery that is part and parcel of the welfare-warfare state.

Imagine a society that has a genuinely unhampered market economy — that is, one in which there is no welfare-state apparatus and no warfare-state apparatus attached to the governmental structure. A society in which there is a complete separation of economy and state, just like the separation of church and state that our American ancestors bequeathed to us. A total free market — a system in which all economic enterprise is free from government control, regulation, or taxation.

In an unhampered market economy, the only way that people could make money is by producing goods and services that other people are willing to pay for. All economic transactions would be consensual.

In such a society, there are inevitably going to be tremendous disparities of wealth. Why? Because consumers place different values on the goods and services that everyone else is offering. For example, a rock star might be much more popular with people than a college professor. As such, the rock star is able to attract many more paying customers to his performances than the college professor is able to attract to his classes.

That means that the rock star is going to make a lot more money than the college professor. If that upsets someone, then he ought to take it up with God because He is the one who created everyone differently.

Yes, the fact is that every single person is different from every other person who has ever lived. Each person is a one-of-kind — unique. Everything about a person is different from everyone else, including his skin color, the color of his eyes, his voice, and his fingerprints. Even the shape of a person’s kidney is different from everyone else’s.

So are everyone’s talents and abilities! The amount of money people make in a free-market society depends on large part on what those talents and abilities are and the value that consumers (i.e., everyone else) put on them. Thus, not only a rock star but also a professional basketball player might end up making a lot more money than a college professor.

When America had no income tax and no welfare-warfare state, there were tremendous disparities in wealth. Throughout that period of time, those at the bottom of the economic ladder were still significantly better off, in terms of standard of living, than they would be in a society in which the government forced the wealthy to share their money with others. That’s because of the accumulation of massive amounts of savings and capital, which increased levels of productivity, which gave rise to ever-increasing real wage rates. It was also because the wealthy used their wealth in ways that benefited the poor, such as building churches that didn’t charge an admission fee to anyone. Also, in the century in which government wasn’t equalizing wealth, many of the poor in America actually became wealthy.

Everything changed when the federal government was charged with the task of equalizing wealth by taking from the rich to give to the poor. While the private sector continued to expand during the early decades of ever-increasing confiscation and redistribution, America has now gotten to the point where the nation is facing the possibility of a massive contraction in economic well-being. That’s because the parasitic class — i.e., those in the welfare state and warfare state — are sucking the lifeblood out of the productive sector at an ever-increasing rate, one that the private sector is finding it increasingly difficult to match.

America once had the finest free-market system in history — no income tax, no welfare-state, and no national-security establishment. That’s one of the things that made the United States exceptional.

Not anymore. Now America is just like all the other countries — one in which people use government to equalize wealth through plunder and looting. It’s what happens when a society enshrines violations of two of God’s sacred commandments—“Thou shalt not covet” and “Thou shalt not steal” — into their political and economic system.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.