Three Counterintuitive Conclusions from the Inequality Debate

The president, supported by Democrats in Congress, has made no bones about the fact that he wants to make income inequality the defining issue of 2014. The gap between rich and poor, he says, is too large to be tolerated, and that as a society we should be focused on narrowing that divide. The assumption underlying this argument is that a lower level of income inequality will automatically be good for those who currently earn the least. But does it? If we are really concerned about helping the poor, shouldn’t we choose poverty as our target for reduction instead of inequality?

Taking inspiration from Jonathan Swift’s satiric recommendation to solve the Irish famine by eating babies, I’ve come up with three absurd policies the federal government could implement that would manifestly reduce income inequality in order to demonstrate how fragile the connection is between equality and well-being, and why inequality is the wrong choice around which to center our public policies.

Policy #1: Ban Babies

The existence of children contributes heavily to income inequality. After all, children earn no incomes of their own, and they represent a considerable drain on the time and money of their parents. Fewer babies means fewer people with low-incomes, and thus a reduction in the aggregate level of income inequality.

In reality, of course, a growing population can only be described as a good thing. A society with more people is one that can produce more, innovate more, and have a greater chance at spawning some of the truly exceptional individuals who shape history. We should be striving to increase the birth rate, already dangerously low in the U.S., rather than restrict it, but a push for greater equality above all else leads us to this backwards conclusion.

Policy #2: Mass Deportation

Oddly, the people who argue that income inequality is the greatest threat facing our nation are often the same people who encourage laxer standards for immigration. Indeed, an increased immigrant population is good for the country in the same way that a higher birth rate is: a greater population to engage in productive, wealth creating activity.

Yet there is no reason to conclude that a rising population of immigrants, with all the benefits they confer, will do anything to reduce income inequality. In fact, the reverse is likely the case. Newly arriving immigrants are typically less well-educated and lack the same labor market skills as their native-born counterparts, and therefore enter the country with an income disadvantage, a disadvantage that can only contribute to greater income inequality. Once more, we see the wealth-creating policy at odds with the income equality policy.

Policy #3: Confiscation and Destruction of Incomes

Margaret Thatcher once stated of a political opponent decrying income inequality in Britain: “He would rather have the poor poorer, provided that the rich were less rich. That is the liberal policy.”

There is no question that one way to reduce income inequality is simply to prevent those at the top of the income distribution from earning so much. Nothing productive need be done with the confiscated money. It could even be destroyed, and the goal of equality would still be fulfilled. Of particular note here is that inequality can be reduced purely through the mechanism of hurting others. This is what is so disturbing about the whole debate.

These examples are intentionally absurd and grossly immoral in order to demonstrate the problems with discussing inequality as a goal in itself. Instead, we should be focusing on pro-wealth, anti-poverty policies that actually improve the lives of the poor in real terms. In this way we can close the income gap by lifting up those on the bottom rung of society, offering them improved mobility and a permanent increase in the quality of life. The misguided focus on inequality, on the other hand, is nothing more than political optics.