Wealth Inequality Only Exists Because Wealth Exists

Posted: Oct 28, 2019 9:45 AM
Wealth Inequality Only Exists Because Wealth Exists

Source: AP Photo/Ted S. Warren

Senator John Cornyn recently tweeted a quotation ascribed to Winston Churchill that I had not seen before.

"The inherent vice of capitalism is the uneven division of blessings, while the inherent virtue of socialism is the equal division of misery."

-- Winston Churchill

In light of socialism’s repeated and overwhelming failures to end poverty, I think Churchill’s words are rather significant. Not that I agree with everything in Churchill’s assertion, because socialism does not divide misery equally. The ruling class administering socialism always make out like the denizens of Panem in the world of The Hunger Games. 

But given the obsession with “income inequality,” Churchill’s statement that, “The inherent vice of capitalism is the uneven division of blessings,” seems quite astute. Whatever was going on is Churchill’s time, the record of socialist misery has only grown larger. Meanwhile, the standard of living has continued to grow under (relatively) free markets and global capitalism.

As Deidre McCloskey has pointed out, this claim is undeniable. “The Great Fact” is that we have experienced a miracle in human history since 1800 so that virtually everyone enjoys a higher standard of living and lives a healthier longer life while the population has, at the same time, experienced exponential growth. As Walker Wright writes:

Poverty has been a moral issue at the center of philosophical, theological, and social thought for millennia. However, over the last two centuries, much of the world has experienced what Nobel economist Angus Deaton calls “the great escape” from economic deprivation. As a 2013 issue of The Economist explained, one of the main targets of the United Nations Millennium Development Goals (MDG) was to halve extreme poverty between 1990 and 2015. That goal was accomplished years ahead of schedule and the credit largely lies with one thing:

"“The MDGs may have helped marginally, by creating a yardstick for measuring progress, and by focusing minds on the evil of poverty. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow—and it was growth, principally, that has eased destitution.”"

No force on earth, other than free markets and bourgeois culture, has brought so much to so many. And the confirming testimony to this Great Fact is that critics of capitalism and the free market are reduced to complaining about income inequality. Because these formerly unimaginable material blessings are “unevenly” divided among people, the fact that they are better fed, healthier, and live longer, doesn’t matter because billionaires exist.

With apologies to H. L. Mencken, the real definition of socialism seems to be, “The haunting fear that someone, somewhere, may be rich.” The calculus almost seems explicitly that we’d be better off with more poverty if it meant we could reduce the wealth of the super wealthy.

But if the majority of people are better off than they were before, how does the existence of the super rich detract from that? I remember being told that capitalism was motivated by coveting one’s neighbor -- ”keeping up with the Joneses” it was called dismissively. But such motivations seem rather mild compared to the hatred expressed toward the affluent.

King Solomon warned long ago that, “A tranquil heart gives life to the flesh, but envy makes the bones rot” (Proverbs 14:30; ESV). Indeed, Solomon advocated a certain kind of concern for collecting wealth but warned against another kind. For an example of the kind of attitude he encouraged, consider Proverbs 21:17: ”Whoever loves pleasure will be a poor man; he who loves wine and oil will not be rich” (ESV). But Solomon contrasted such long-term saving (or in socialist-speak: “hoarding”) with get-rich-quick schemes: "A faithful man will abound with blessings, but whoever hastens to be rich will not go unpunished" (Proverbs 28:20; ESV).

It is stupid for us to make ourselves miserable worrying about billionaires at a time when we are better off than all our ancestors. Therefore, it is much more delusional to use those billionaires as an excuse for ending an economic system that has reduced poverty for everyone and replacing it with a totalitarian system that spreads misery.