The Wealth Gap

Why is everyone upset about the apparent gap between the rich and the poor?  Our hackles go up when we see mansions for some and double-wides for others.  We are part fascinated and part disgusted by the Paris Hiltons of the world who have so much while appearing to do so little to get it.  Are we right to think that wealth should be more or less evenly distributed?

No, we are not.  At least not in a world where wealth is uncoupled from political mischief.  How is it that the rich get so rich?  In some cases, it is because it is earned honestly.  The inventor of a life-saving vaccine or a new cell-phone design who sells his/her product with no government subsidies and absent regulations that stifle legitimate competition deserves every penny.  No one has a rightful claim to what he/she produces.

On the other hand, we know full well that many a banker, financier, or manufacturer has attained ghastly amounts of wealth through political favors.  Here we have a legitimate beef.  You and I have little sway with the Washington crowd.  We not only have to earn it on our own, but contend with the myriad regulations and other disincentives the bureaucrats put in our way.

When someone creates wealth through free markets, it is only the result of helping others.  No other possibility exists.  The gap that emerges between rich and poor is deceptive–the poor are uplifted by the products the rich make and/or the jobs they create.  The fact that some people are better at providing wealth to others is perfectly moral and right.

We will always retain some doubt as to who our real benefactors are until such time as we ban government from the economy altogether.  Let’s do that and find out what we each are really worth to each other.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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