Egalitarianism is very definitely not a feeling but an intellectual construction. I don't think the people at large really believe in egalitarianism; egalitarianism seems to be entirely a product of the intellectuals. -- Hayek, Interview with Bork (1978).
Social
inequality is a result of diverse ability, efficiency and motivation of people.
Those who are more creative and innovative in producing more output from
limited resources will earn more than the others. And those who are more motivated, more
ambitious in producing something that is so innovative and revolutionary, and
they later become successful, will also become more wealthy than the rest of
society.
So the
wider the gap of efficiency and motivation among people, the wider the
inequality becomes. Forcing equality among people in society as is done in
socialist countries tend to produce more poverty than wealth. This happens
because by penalizing creativity and efficiency and subsidizing irresponsibility
and inefficiency, the system of economic rewards and punishment is corrupted.
If people can eat even if they do not work, why should they work hard, or even
work at all.
Free
people are not equal and equal people are not free. If people are free to dream
high, to work as hard and as efficiently as possible, and some people are free
to bum around, to sleep and party as often as possible, then inequality among
people will widen. Forcing equality means putting a gun on some people’s head
that they should not excel compared to the rest of society.
There was
a long article by Oxfam last January 22, 2013, After
extreme poverty, let’s look at extreme wealth arguing that extreme
inequality is “economically inefficient, politically corrosive, socially
divisive, environmentally destructive, unethical, not inevitable.” So they
propose to “end extreme wealth by 2025, return inequality to 1990 level.”
To realize
their goal, Oxfam is proposing more “regulation and taxation… Limits to bonuses, or to how much
people can earn as a multiple of the earnings of the lowest paid, limits to
interest rates, limits to capital accumulation… progressive taxation, cracking
down on tax avoidance and tax evasion... Closing tax havens… a globally agreed minimum rate of corporation
tax.”
The politics of envy implicitly embedded in
these advocacies does not recognize the benefits to humanity produced by the
super rich. Among such people are Microsoft founder Bill Gates, facebook
founder Mark Zucerberg, google founders Larry
Page, Sergy Brin and Eric Schmidt, and
youtube founders Chad Hurley, Steve Chen and Jawed Karim.
Have these people helped create economic
inefficiency, political corrosion, social divisiveness and environmental
destruction in the process of their giving us facebook, google, youtube and
Microsoft? So that their excess wealth and privileges should be subjected to
extra taxes and regulations by governments? This is a doubtful if not mistaken
assertion.
Here in the Philippines, multi-billionaires
Henry Sy, Gokongwei, Lucio Tan, the Ayalas and many others have become super
rich not only because they founded or developed businesses that were patronized
and deemed useful by millions of Filipinos like SM, Robinsons, PAL, Ayala Land,
Globe, Smart, and other big businesses. In addition, they do not have enough
competitors because of Constitutional limitations and prohibitions on foreign
equity ownership on certain sectors of the economy.
There is nothing wrong with being a
multi-billionaire if this is achieved through useful invention that benefits
humanity. Actual examples are the discovery of facebook, google and
youtube. Take also this hypothetical
example.
Supposing a bunch of science geeks and nerds
make a grand ambition to create or invent a rice or potato variety that is
packed with certain nutrients and vitamins that will improve or boost its
consumers' immune system against certain infectious diseases. It is like an
indirect vaccine against certain diseases minus the injections. Various
laboratory and clinical trials prove that their invention was successful --
safe, effective, no negative side effects, etc. Their rice and potato variety
has become a worldwide hit, the geek inventors are selling their rice at P100
per kilo equivalent, and millions and millions of people worldwide are buying
their rice, the geeks became super-super rich, they became multi-billionaires.
By simply inventing products and services
that are proven to be useful to people, rich and poor alike, these businessmen
have already done their part in helping humanity.
It is presumptuous to say that all the
super rich only amass their wealth only for their personal and selfish needs,
that they are incapable of donating their wealth to the poor, so governments
must confiscate a big portion of their wealth and government politicians,
officials and bureaucrats, and favored NGOs will redistribute such wealth to
the poor.
This is wrong. There are many examples that
very rich people voluntarily give away their wealth to the poor, at their
chosen projects, programs and terms, not as dictated and prioritized by
government politicians and officials.
The Bill and Melinda Gates Foundation
(BMGF) gives away $4B a year on average, perhaps in perpetuity, for health
charity alone. If Bill Gates' money was
confiscated early on by the US government due to envy or simply because it is a
"sin" to amass too much wealth, that foundation's money and global
health initiative would not have been possible.
There is also this interesting story of a
“nomad billionaire”, Nicolas Berggruen, who as of mid-2012 has a £1.5 billion
fortune but plans to give away half of his wealth. He has bought £881m stake in
Burger King but he owns no house, no car, not even a watch and carries things
in paper bag when he travels.
Class envy and resentment should be
curtailed and people should not be penalized for their
success. When some people become very rich, their wealth pale in comparison to
the greater wealth enjoyed by humanity as a whole through the higher standard
of living that the inventions and production of the rich have enabled.
Profit from successful businesses are not
hidden in cabinets or idly parked in banks for long. Those profits are reinvested
and plowed back into the national and global economy either by expanding the
business and hiring more people, or by buying and consuming various products
and services, which support other businesses that also hire other people.
If we want prosperity for as many people as
possible, allow the producers to produce more, the innovators to invent more,
the job creators to hire more. Make things easy for them, do not allow the
politics of envy via more regulations and taxation to expand endlessly.
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See also::
Inequality 12: Billionaires and the UN Politics of Envy, July 11, 2012
Inequality 12: Billionaires and the UN Politics of Envy, July 11, 2012
Inequality 14: 99 Percent to Support the 1 Percent, October 20, 2012
Inequality 15: SM, Henry Sy and Class Envy, October 31, 2012
EFN Asia 15: Distortions of Welfare Populism, January 17, 2013
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