Income Equality Theory: Not Even Wrong

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Posted: Jun 25, 2021 9:26 AM
Income Equality Theory: Not Even Wrong

Source: AP Photo/Mark Lennihan

You’ve probably heard the old story about Wolfgang Pauli’s response to a scientific paper he found himself obliged to review. The paper dealt with a scientific subject in non-scientific ways, suggesting possibilities that were not susceptible to testing to determine their validity. Pauli’s response: the paper was “not even wrong,” which can have some scientific value. It was useless.

Something similar must be said about the notion of “equality of outcome,” and of any social, economic or political theories that set such equality as its aim.

The comparison is not exact, mind. Equality of outcome, if it were possible, would be wrong as a goal, working evil instead of good. But that problem can never arise, because such equality is also completely impossible – and, worse, incoherent.

When the right (here meaning the conservative/libertarian-fusion, “classical liberal” definition used in the United States, not the European right) talks about equality, it means equality before the law. The law applies to everyone in the same way, for the same reasons, with the same intensity. This is a goal that, even if perhaps never perfectly achieved (what in this world is?), is possible, and so can be materially accomplished. 

First thing to do is to get rid of any royalty and nobility to whom no laws apply, or to whom a special set of laws apply. The next step is to get rid of – and guard against – informal privileges that mirror the effects of noble castes. These informal privileges can arise from all sorts of sources, and must be combatted wherever they arise. These privileges can take many forms, as by prosecuting some people for behaviors allowed to others, or by closing the doors to justice to some, but not to others. Disagreements can arise about what constitutes such closings, or how to guard against discriminatory application of the laws, and these can result in somewhat different opinions about what constitutes the best version of equality before the law. But these are disagreements at the margin. Equality before the law makes sense, and it can be broadly implemented.

The same is not true of equality of outcome.

Equality of outcome is immediately defeated by the simple, ineluctable fact that people are different from one another. They have different abilities, different skill levels and different interests. This cannot be changed. (The fact that human nature cannot be changed, that there will never and can never be a “New Soviet Man,” has been learned the hard way so often since the 1790s that you’d think it would have gotten through by now.)

As a result, a polity cannot simply pass a law requiring that everyone make the same amount of money each year, and then find that equality of outcome has been achieved. First of all, there will have to be enforcers to ensure that no one violates that law. As a result, there will then be two castes of actors: those who enforce, and those who obey. Already, outcomes are different, because some people get to tell others what to do, while others have to submit to that authority. (If I could change human nature, this would be the thing I’d weed out: that miserable hankering in so many people to control others’ lives. But see above.)

Then this problem: What are the enforcers to enforce? We’ve assumed a law that requires that everyone make the same income every year. But some people are more talented than others, and some have more lucrative interests than others. So some people are going to make that one-size-fits annual wage in a few hours or days, while others will have to work all year to make it. So even though wages are fixed, people’s free time will vary wildly. And some people will get to spend the time they work each year doing things they love, while other people will face a year of relative drudgery. Far different outcomes, despite equal wage packets.

Meanwhile, how is the annual fixed wage to be set? Will it be the amount that the least skilled person can make working day-and-night all year? That’s going to be a very low amount, which means everyone will be miserable and poor, while most people have an immense amount of free time on their hands in which they are not permitted to do anything remunerative. That system won’t last long. But if the level is set higher, then some (and more as the fixed wage level rises) people aren’t going to be able to make their wage under any circumstances. So then they are going to get more than they earned over the year, while others – by definition – will have to get less than they earned. But this is inequality of outcome, because not everyone is getting the full return on their efforts.

Any possibility of equality of outcome has already collapsed. And the impossibility – the fundamental incoherence – of the goal is underscored by the fact that any attempts to climb the insuperable hurdles already identified will make things far worse from the point of view of equality-of-outcomes itself. If some are made to work long hours to improve the lives of others, then return-of-value outcomes grow increasingly skewed. And forcing people to work for others’ benefit will require an ever-increasing apparatus of control, meaning that differences in power will grow bigger and bigger. But that power difference is itself a vital difference in outcome. Equality of outcome would demand that everyone get an equal chance to run others’ lives.

Equality of outcome is only possible if everyone is exactly the same, and everyone is exactly the same only when everyone is dead.

Judge “great reset” theories and plans accordingly.

Scott Shepard is a fellow at the National Center for Public Policy Research and Deputy Director of its Free Enterprise Project.