Saturday, September 6, 2014

Why equalizing income is a bad goal

One of the most sacred tenets of liberalism is the goal of equality of condition: the idea that there should be no rich or poor, but that all should have the same amount of income and wealth, and that no one should possess any more than any other.

There are both practical and philosophical problems with this ...

There are several problems with this goal, and the problems include both the practical and the philosophical. I will address one example of each kind of problem, to show that this is a goal that is not only impossible to attain, but whose pursuit actually harms society; ultimately backfiring on its advocates, and making society worse off. (In doing so, I should make clear that I do not oppose equality of opportunity, as I am a fiery advocate of this kind of equality. It is equality of condition that I oppose, and it is equality of condition that I will argue against now.)

Determining whether different kinds of wealth are equal is arbitrary

First of all, equality of condition is an unattainable goal, which runs into several practical problems. One of them is that determining whether different kinds of wealth are equal to each other is ultimately arbitrary in nature.

Apples to oranges (sometimes literally)

Are five apples equal to five oranges? How would we determine this? Would we measure their weight, their size, or how good they tasted?

Eye of the beholder

If the latter, how would we solve the problem of differing tastes? (In other words, if one person thinks apples grown by Michael are tastier than apples grown by Fred, while another thinks just the opposite, how would we solve this problem of whether they're equal?)

Which factors are most important?

Would we factor the pounds, space, and taste into one combined measure? If so, how much weight would we give to each one?

No answer would satisfy everyone

Such decisions are totally arbitrary, and there is no answer that would satisfy everyone. Even supposing that people were willing to meet the standard without being compensated - without being given more money than the people unwilling to meet it (an unequal reward) - how would we determine whether this amount of one kind of wealth is equal to that amount of another kind?

Money is arbitrary, too (just for the record)

Having money as a standard unit of account might seem to solve this problem; but whether money prices are determined by free markets or government bureaucracies, every solution to this problem must, by its very nature, be arbitrary. (The free markets reflect the personal tastes of customers, while government bureaucracies reflect the personal tastes of bureaucrats; but one way or the other, the solutions to this problem are ultimately arbitrary. They cannot be anything else.)

Philosophical problems

But besides the obvious practical drawbacks, there are deep philosophical problems as well. Let me illustrate with an example:

Desert island scenario #1

Suppose for a moment that there is a desert island that is totally cut off from the rest of the world. The island has three individuals on it, whose names are Al, Bob, and Chris. A godlike figure arrives, and offers them a simple choice between two possible outcomes. One is that Al receives 60 units of happiness, Bob receives 50 units of happiness, and Chris receives 40 units of happiness. Clearly there is inequality in this choice, and the men are initially reluctant to take it.

Desert island scenario #2

But the second choice has another problem: In the alternative scenario, all three men will have just 10 units of happiness. This will equalize the happiness between these men, but make them all less happy than under the first option. 10 units of happiness is less than 40, 50, or 60 - much less - so all of them would have less happiness under this alternative. Which option would you choose?

Would equality be worth it if everyone were worse off as a result? (Not a hypothetical question ... )

The true liberal would answer that we should choose the second option, because equality of condition is more important than anything else. Even when it would guarantee all parties would be worse off, they'd rather have less happiness to go around than see that anyone has more happiness than others. That is the essential problem with liberalism, and it is not a bad illustration of the difference between capitalism and communism. Communism would pursue equality at all costs, while capitalism would prefer the greatest happiness of the greatest number. (I don't care if my neighbor is happier or richer than I am; I'd rather have even 40 units of happiness than 10.)

Which scenario would you choose?

Before they dispute the accuracy of this description of capitalism vs. communism, I would ask my liberal readers to comment on which scenario they would choose. I will delete all comments about the accuracy of this description of capitalism vs. communism, unless they include an answer to the question given above along with these things. Liberals, consider yourselves warned.

Pursuing equality of condition is harmful

So this, in essence, is why pursuing equality of condition is a bad goal. It is not only impossible to work out in practice, but has deep philosophical problems with it that make it undesirable, even if it were attainable; and its pursuit is actually harmful to society.

Why equalizing income conflicts with rewarding good behavior

Part of a series about

Communism in theory: Why Marxism can never work

The "Communist Manifesto" (and how Marxism got started)
Marx's "labor theory of value" (and why it doesn't work)
Problems with equalizing income (even in theory)
Problems with rewarding good behavior (under communism)
In defense of John Locke: The need for private property

Communism in practice: The results of the experiments

Revolution in Russia: How the madness got started
History's horror stories: The "grand experiments" with communism
Germany and Korea: The experiments that neither side wanted
Civil war in China: How China was divided
Chaos in Cuba: Castro and the communist revolution
Fall of the Wall: The collapse of the Soviet Union
Actually, communism has been tried (and it doesn't work)

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