Last week, America's Future Foundation hosted three mini-debates in River North. One was on the presidential race (does it really matter?) and another was on Ron Paul's foreign policy (is it dangerous?). Zack Fivenson, John Giokaris, Dave Ratowitz, and John Tillman of the Illinois Policy Institute participated in these debates, which you can view on AFF-Chicago's YouTube channel.
I participated in the final debate: "Is income inequality unjust?"
Although AFF is committed to the ideas of free markets, limited government, and individual liberty (the ideas I discuss on this blog), we are also an open forum for young professionals interested in all ideas and current events. We want to hear what others think, including the notion, for example, that growing income inequality is in itself worrisome to social cohesion and the economy.
Unfortunately, we weren't able to find anyone from that camp to participate in our debate, so I filled in.
Pitted against the skillful rhetoric of one Shalesh Kumbhat (a recruiter in the Loop), I argued an atypical libertarian argument: Income inequality is sometimes very unjust.
You can see video from this debate below. Unfortunately, our camera ran out of juice before the debate finished, but you'll get the gist. Also, although I am very white, I'm not luminescent as the video makes me (and everyone else) appear.
There is nothing wrong or unjust inherently about income inequality. The gap between the lowest, median, and highest income individuals is itself meaningless. It's just a number that says nothing about the ability people in each of these groups to buy things, whether bread, milk, cars, or yachts.
And just because the wealthiest are pulling away from the middle class in terms of income doesn't mean necessarily that the middle class is disappearing, as so many like to argue. To make that claim requires a lot more.
Spending power is the real question. It matters how much bread, milk, television, washing machine, iPhone, and airfare I can buy with my dollars, not how many fewer dollars I have than Bill Gates.
It's also important to think of the hours spent working to earn the amount these items cost. Here's a handy list of the difference in the number of hours Americans have had to work to buy items from Sears catalogues in 1975 and then in 2006. Using the average hourly nominal earnings of production workers for 1975 and 2006, economist Don Boudreaux found that it took 11.49 hours of work to buy the highest-priced work boots in the Sears catalogue in 1975, and 8.26 hours of work to buy the same in 2006.
But I digress. Income inequality is unjust when it is brought about by government interference in the marketplace. It's unjust, for example, when government prohibits the sale of incandescent light bulbs, thereby steering business toward General Electric for its expensive fluorescent bulbs. And it's unjust when the least skilled and poorest among us are priced out of the labor market by minimum wage laws. In both cases, the gap between rich and poor expands because government thought it knew best.
Inflation and the minimum wage are two of the most insidious factors contributing to the state of the poorest and least skilled among us. It's fine and dandy for the middle class when boots take fewer hours to buy today than 35 years ago, but if your skills aren't worth $7.25 per hour, you're not going to be hired, and you won't have any income at all.
If you're truly worried about income inequality, focus on changing the ways public policy exacerbates the problem through legislation that seems nice but creates all sorts of undesirable and unintended consequences.
Filed under: Justice