Income inequality has become a popular buzzword used by those on the left to drive the narrative that the American system is unfair to those in the lower income brackets. We’ve seen everything from speeches, to protests, to riots form over how the rich seem to be putting those who make little into dire situations that make them poorer, as the rich get richer.
But the truth is that income inequality has done more to lift the poor out of squalor and into a better lifestyle than any government program could dream of doing, and that’s exactly what is discussed in Prager U’s latest video.
In it, John Tamny, editor of Real Clear Markets, explains how income inequality has made life better, not just for the rich, but for everyone. The rich, Tamny explains, turns expensive products into cheaper products by finding a great idea and investing in it, changing it into a product that can be bought and sold to people even in the lower income brackets. A perfect example was the cell phone, which was $4,000 when it was first debuted. Now everyone has one, because the rich bought it and improved it.
“The free market is about turning scarcity into abundance,” says Tamny. “What was once available to the few is now available to the many. Wealth inequality is an important corollary to that truth.”
“This feature of the free market – income inequality – can appear terribly unfair,” he explains further. “But with a little further investigation, the real picture becomes clear. Income inequality makes what once seemed like impossible luxuries available to almost everyone. It provides the incentive for creative people to gamble on new ideas.”Watch the video, and Tamny’s superb explanation below.