One of the most problematic economic misunderstandings in existence is the one about "the economy.” In truth, there’s no such thing. An economy can’t be massaged, or nurtured, or grown; rather an economy is just people. Broken down to people, our natural state is to want to better our individual situation. Free people left alone to prosper tend to do just that, particularly in a relative sense. The latter helps explain why the United States is so prosperous. Its people are broadly free.
Which brings us to a recent Pew Research Center (PRC) report on “Asian inequality” in the United States. Writing about it for the Detroit Free Press, a rather downcast Frank Witsil reported that “the distribution of income among Asians went from being one of the most equal to the most unequal among America’s major racial and ethnic groups.” Ok, so why the sadness?
What has Witsil along with the authors of the Pew report so down is what should have them elated. It signals that like every immigrant group, the Asians who reached the United States were once equally poor in the income sense. That they’re no longer equal amounts to wonderful news, and it explains why the U.S. remains a magnet for the world’s poorest. The United States is where poor people come to erase their poverty.
That many formerly poor Asians are now well-to-do and rich (Witsil cites Census data which shows that Asians are the highest earning ethnicity in the U.S.) is first and foremost an inconvenient truth for the social justice warriors who claim rising wealth inequality represses poor people. If true, the poor wouldn’t routinely risk their lives trying to get to the very unequal United States in the first place. That the world’s poorest continue to choose the U.S. as the place to better their economic selves is a loud market signal indicating that opportunity is greatest where wealth and wealth disparity is greatest. More on this in a bit.
And since the researchers at Pew are clearly focused on race, the fact that Asians thrive stateside is similarly an inconvenient truth for those who claim racism exists as a barrier to upward mobility. If so, this would realize itself through ongoing income equality among Asians. That there’s a growing wealth disparity speaks to another reason for the PRC and Witsil to be elated. Instead, both bath themselves in non sequiturs.
Witsil writes that the rising inequality among Asians “could thwart the kind of economic opportunity, mobility and influence” that not-yet-rich Asians want to eventually have. In his defense, Witsil is merely parroting the PRC’s conclusions that “[A]n increase in income inequality matters because of the potential for social and economic consequences.” And the latter means what? Apparently trying to infuse meaning into what is meaningless, the PRC report added that “[P]eople at the lower rungs of the income ladder may experience diminished economic opportunity and mobility and have less political influence.” Really? How?
Not explained by Witsil or the PRC is why the success of some Asian individualswould exist as a barrier to the achievements or upward mobility of others. Are they trying to say that Asians are in some way different, and somehow can’t be exposed to economic success within their ethnicity? Does it cause them to curl up in the fetal position and simply stop trying? Such profiling is the equivalent of the PRC decrying the great wealth amassed by private equity billionaire Robert Smith for it allegedly bringing about “diminished economic opportunity and mobility” for black people, or Witsil dismissing the wealth earned by Joseph P. Kennedy as a barrier to the upward mobility of other Irish Americans. Basically Witsil and the PRC floated the most ridiculous of reasons to decry wealth creation among ethnicities only to back up what’s absurd with nothing. Asians who might be so careless with their time as to read the Pew report ought to be offended that PRC’s researchers apparently think them incapable of responding productively to the achievements of fellow Asians.
Having offered up the airiest of non sequiturs, the researchers then turned to education to salvage a report about nothing. Searching for reasons behind the growing gap in Asian wealth, the researchers happened on evidence of the “easy-to-use” variety which signals that certain Asians are more educated than others, and broadly more educated than those living in the U.S. overall. There’s your answer. Wealth disparity is tied to educational disparity! It all sounds so air-tight until we remember that the argument has no merit. If worthy, it would manifest itself through enduring poverty in Asia itself. Except that we’ve seen the opposite. Indeed, the individuals who built China up from the literal wreckage that was communism were among the least educated people on earth. Those who built South Korea were similarly undereducated, and often illiterate. What this tells us that is that individual freedom is the driver of economic advance to a much greater degree than what’s taught in school. Better yet, it should be said that education is an effect of wealth creation, not a driver of it. Obviously. School at best teaches yesterday’s news, while entrepreneurs are almost by definition doing what’s never been done before.
Speaking of entrepreneurs, it can’t be ignored that other than a lack of economic freedom for individuals, the only barrier that routinely suffocates entrepreneurial endeavor is a lack of capital. Always. There’s quite simply no progress without wealth being matched with talent. Looked at in terms of a growing wealth gap among Asians, the happy truth is that as some ascend the income ladder they’ll amass the wealth necessary to invest in those who similarly want to rise up. Such is the genius of the rich: Short of them quite literally stuffing all of their wealth under a mattress, they must invest it such that we all have instant access to it in the marketplace in order to improve our individual situations. What this means is that as opposed to growing Asian achievement fostering “diminished economic opportunity and mobility,” the happier truth is that rich people have no choice other than to put their wealth to work to the economic betterment of those not yet rich. Where the rich are is once again where the opportunity is. The more wealth created by Asians, the more economic opportunity for everyone thanks to a surge in the amount of investable capital.
In short, the wealth creation decried by the PRC and those who report on their doings is the surest sign that as the wealth gap between rich and poor increases, so does opportunity for those who want to rise. Those who do need freedom and capital, and the United States has both in abundance. The stateside Asian economic renaissance loudly supports the previous truth, and happily signals more of the same.
Yes, individual achievement begets much more in the way of individual achievement. We decry rising wealth inequality at our peril.