Campus Media Response: Are We Learning the Right Lesson about Inequality?

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In a recent piece for UC Berkeley’s The Daily Californian, Casey Given criticizes Professor and former Labor Secretary Robert Reich’s portrayal of poverty and inequality in America. Having enrolled last year in Reich’s popular course “Wealth and Poverty,” Given raises interesting economic and philosophic questions about Reich’s analysis.

After first encouraging students to supplement Reich’s “copious charts” with research of their own, Given offers two primary economic criticisms. One is that Reich relies exclusively on household income as an indicator of a family’s standard of living. But Given posits that perhaps household consumption is a more accurate indicator. He links to a New York Times article which shows that when comparing the latter to the former, the difference in the standard of living is far less dramatic. Second, Given explains that in his analysis of low- and high-income households, Reich simply neglects to include details such as the number of working family members, whether they work full time, and their age, details that might indicate that one’s income is proportionate to one’s productivity. This indication directly contradicts the liberal notion that all inequality is bad and unjust.

It thus seems that Reich may not provide the fullest account of these issues. Given does not limit his criticism to economics, though. Where a redistributionist such as Reich would support a state which intervenes in the economy to achieve his ends, Given is weary of such a notion. He explains:

One must ask how exactly these thieves [the rich] steal from a marketplace that functions through voluntary exchange between buyer and seller. The answer is found in the institution with the monopoly on violence—the government. Through its countless bailouts and subsidies to big business, the federal government regressively redistributes wealth from poor to rich to the tune of billions every year.

Given is correct that because government is an agency of force, it has no place interfering in the free market. Economic prosperity depends crucially on the power of the unshackled human mind, which is possible only when production and trade are given the same freedom as speech and religion. As such, it is not surprising that when the government forcibly intervenes in the economy, resources are transferred from the productive (whether rich or poor) to the unproductive (whether poor or rich), and the result is an unjust redistribution of wealth.

Unfortunately though, Given’s statement could be taken to imply a contradiction: that while it’s wrong for the government to redistribute wealth from poor to rich, it’s quite okay to do so in the opposite direction, through excessive taxation to fund the welfare state. Government programs such as Medicaid disproportionately tax those who do pay taxes to aid those who don’t, and represent a great deal of “progressive” wealth redistribution.

After his brief critique of Reich’s economic narrative, Given offers a glimpse into the proper relationship between the government and the economy—that government exists to protect the rights of its citizens, allowing true voluntary exchange to occur—but he stops short of fully condemning the kind of progressive redistributionism and welfare statism which Reich advocates. In their piece “The Entitlement State is Morally Bankrupt,” Yaron Brook and Don Watkins offer such a condemnation:

Far from offering genuine benefits, whenever the government takes people’s money and decides how that money is “best” spent, [the redistribution of the entitlement state] makes life harder for rational people. A rational person needs the freedom to plan his own life, make his own choices, and support his own existence.

In his criticism of Reich and government redistributionism, Given neglects to condemn, as morally bankrupt, the kind of welfare statism that victimizes all who aspire to create wealth.

Image via Wikimedia Commons

Posted by on April 4, 2012. Filed under Campus Media Response, Spring 2012. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry