socialism income-inequality rule-of-law equality

The Ideal of Equality

Is Equality good or bad, constructive or destructive?

In a world of true equality men would be like bees and there would be no interest in freedom. All would be equal in their assigned task and would fill it unthinkingly under the direction of instinct. Each would be ready to give his life to defend the hive, easily replaced by the nearest available bee, under the direction of the queen. But men are not bees and "free people are not equal and equal people are not free."

Overview

Various ideologies define equality in different ways, and often in vague emotional ways that defy definition. Nevertheless, there are two broad definitions of equality: legal equality and material equality. The ideal of legal equality requires the law to treat all men equally, regardless of race, wealth, political connections, etc. It supports individual freedom. The ideal of material equality strives to divide wealth among all the people equally. This objective is pursued through central planning by an interventionist government that takes from the haves and gives to the have-nots. A third type of equality called “equality of opportunity” is frequently used to support both legal and material equality, depending upon how opportunity is defined.

Like a fork in the road, these two ideologies, legal and material equality, lead to two completely different worlds. One leads to prosperity, the other to poverty. World leaders are focused on material equality, decrying income inequality as the greatest evil in the world today. But people need to understand the consequences of pursuing material equality at the expense of legal equality if we are to maintain the prosperity and that has been produced over many generations (18).

Legal Equality

Equality before the law aims at ensuring everyone equal treatment by the law and courts. It is based on rule of law, the concept that everyone is subject to the same laws and no one is above the law. The purpose of judges and juries is to apply the law to every case based on the same criteria. Rule of law gives everyone the same legal protections, clearing the way for people to make the most they can out of their lives with their native talents and those they acquire through work and experience. It does not ensure material equality of outcome. It seeks only to ensure freedom from discrimination and arbitrary treatment.

While still recognizing the natural inequality that comes from individual strengths and differences, the law is applied to everyone equally regardless of race, personal beliefs, or political connections. This provides a “level playing field” where everyone knows the rules and is required to follow them. But it's considered unfair to forcefully take from those who produce to give to those who don’t, since that would not be equal treatment under the law; it would be special treatment, which encourages special favors for the politically connected (otherwise known as corruption).

If the laws are fair (free cooperative markets, property rights, etc.), the natural inequality of talent is channeled into popular products that raise the standard of living for everyone, while especially rewarding those who work and invest to create the universal benefit, instead of rewarding the political and business elite who unfairly manipulate the system.

Material Equality

Material equality aims at ensuring equality of outcome, with everyone receiving an equal share of the material goods and services produced in a society. In its utopian ideal state, there are no rich or poor. Everyone has the same amount of wealth and the same standard of living. Because such an ideal cannot be achieved in the real world, most proponents seek a “more just distribution” of wealth and income, with a few elite at the top deciding who deserves what. It seeks to “level the playing field” by ensuring that everyone has the opportunity and resources to succeed and is taken care of if they cannot.

Those who seek to enforce material equality frequently claim a paternalistic concern for the poor and needy and seek to set up a system that transfers other people’s wealth (not theirs) to those they want to help, rather than depend upon civil society and voluntary charity. A good question is, "who really cares about the poor?", the makers or the takers?

But in the final analysis "Free people are not equal, and equal people are not free."

Country Comparisons

Although there are a few small countries like Norway and Switzerland that have been able to maintain a high standard of living along with greater material equality because of their small homogeneous populations and unusual resources, such results have never been achieved in countries with a large diverse population. An analysis of inequality in multiple countries helps explain this contrast.

Forced Equality

The idea of taking from the rich and giving to the poor may sound emotionally appealing, with visions of a benevolent Robin Hood government taking from the bad guys (the corporate nobles) and giving to the good guys (the poor peasants) from which the wealth was originally taken. No doubt it was this sentiment that inspired the name of the California taxing authority, the “State Board of Equalization.”

Politicians promise wealth and prosperity for everyone, but the end result of their equalization programs, when taken to their logical extremes, has been a redistribution of less and less until all but the politically connected are worse off.

Unintended Consequences

Pursuing material equality reduces the efficient use of resources. As Arthur Okum (late Yale University and Brookings Institute economist) is reported to have put it in , Equality and Efficiency,

“… not only can more equal distribution of incomes reduce incentives to work and invest, but the efforts to redistribute—through such mechanisms as the tax code and minimum wages—can themselves be costly. Okun likened these mechanisms to a ‘leaky bucket.’ Some of the resources transferred from rich to poor ‘will simply disappear in transit, so the poor will not receive all the money that is taken from the rich’—the result of administrative costs and disincentives to work for both those who pay taxes and those who receive transfers.”

In the end, the pursuit of material equality kills the goose that lays the golden eggs instead of the vultures.

The only way to create material equality is to force those who produce to take care of those who don’t or can’t. Although you can call it “redistribution”, forcing one person to work to supply another’s wants and needs should be called slavery.

Injurious Laws

Injurious laws motivated by egalitarian sentiments are the basis for the modern welfare state, and their consequences are frequently the opposite of their intent. For instance, in 1990 excise taxes were raised on boats, aircraft, and jewelry in an effort to narrow the gap between the "haves" and the "have-nots" and raise $31 million in new federal revenue. Instead, congressional economists found that it brought in only $16.6 million in taxes while destroying almost 10,000 jobs in the boat, aircraft, and jewelry manufacturing sector which resulted in $24.2 million being paid out in unemployment benefits, or a net loss of $7.6 million and a lot of misery for those who were laid off.

Road to tyranny

When natural inequality is suppressed in the economic market, those with ability will either leave for freer countries or gravitate into politics, where they can get inside favors and extract money from others. History has shown that this process destroys economic progress and prosperity, leaving everybody in greater poverty except the powerful political elite. In most cases, the elite’s rise to power comes with the paternalistic promise to humble the rich, take care of everyone from cradle to grave, and make everything fair. But the price is total obedience to those who centrally plan every aspect of life. In such a system, the goal of life becomes political connection, not production. As a result, the pursuit of material equality falls short of its aim because it ignores human nature. When their centrally planned economy fails to produce the expected results, and equality of misery spreads among the masses while privilege and wealth accumulate among the governing elite, the free market is blamed, resentment spreads and the people revolt, leading to violent oppression of the masses. Such is the history of socialism.

Equality’s Bottom Line

Societies that have aggressively pursued material equality have had to resort to force because inequality is natural and any efforts to promote material equality through use of government force induces those with superior ability to seek wealth through power manipulation instead of producing concrete goods and services that benefit people’s lives. In the end such efforts have destroyed freedom and prosperity and frequently led to tyranny instead of equality.

Equality of Opportunity

Equality of Opportunity is a related concept that has been invoked by proponents of both legal and material equality. Consequently it is not a separate form of equality but simply a different way of talking about the two basic types of equality.

Legal Equality of Opportunity

For those who support legal equality, equality of opportunity implies that all people should be treated similarly, without regard to wealth, religion, sex, race, or political connections. Opportunity in this sense means that all people should be able to compete for jobs, positions, loans, etc. based on their ability, not their political connections, and that the best qualified person should get the position, loan, etc.

The purpose of the law is to ensure that the same criteria are used to evaluate everyone, not whether the outcome fits some predetermined or arbitrary quota/requirement. Thus equality of opportunity provides the freedom to do something and not be forced to do anything, rather than the right to have something and force others to provide it for you. The right to do and to be free from being forced to do are considered the universal fair “negative rights” that belong to every human person.

By contrast, the “right” to force others to supply something for you, is one of the unjust “positive rights” that are bringing back slavery in the name of “fairness”. These rights are inherently not universal, and don't belong to everyone, but only those “lucky” enough to have tax money funneled to them.

It might seem ironic that “negative rights” are called universal, natural and fair because they make no demands on anyone else, while “positive rights” are rights that require arbitrary favoritism of some at the expense of others who must provide their “rights” for them. (Negative Rights – good; Positive Rights–bad!)

Supporters of legal equality evaluate each case on its individual merits rather than on the basis of group results. Government intervention to remove opportunity barriers in individual or special circumstances is a separate question.

Material Equality of Opportunity

Proponents of material equality consider equality under the law insufficient. They require that everyone must have not only the right to do something but the actual means to do it. Thus, to them, real freedom requires “quite real palpable conditions” that must be created by government. The disadvantaged must be given the tools/means to compete with those who with greater ability in the name of fairness. This approach seeks to compensate for natural inequality of ability so all people can exercise their right to an equal share of the society’s output and wealth.

They also base their assessment of the results on group statistics rather than looking at each case on an individual basis. Because supporters of material equality believe that government power should be used to enforce equality, they also support the use of force (affirmative action) to impose their view of equality of opportunity.

Lesson - Quackery of Equality

There are different ideals of equality, the pursuit of which produces drastically different results. Legal equality produces individual freedom and prosperity, while policies focusing on material equality lead to ever increasing government intervention in the economy and the lives of the people, diminishing or destroying freedom and increasing poverty.

Equality of opportunity means opposite things to those that support legal and material equality. To the former, it means the opportunity to compete for a job based on ability while to the latter it means the ability to compete regardless of ability.

It is critical that people everywhere understand the difference between the concepts of legal and material equality so they can avoid being swept into the camp of political leaders seeking power by appealing emotionally to the “unfairness” of material inequality, the pursuit of which requires involuntary servitude also known as slavery.

"Economic equality in a free society is a mirage that redistributionists envision—and too often are willing to shed both blood and treasure to accomplish. But free people are different people, so it should not come as a surprise that they earn different incomes. Our talents and abilities are not identical. We don’t all work as hard. And even if we all were magically made equal in wealth tonight, we’d be unequal in the morning because some of us would spend it and some of us would save it."

To produce economic equality, governments must force people to stop working harder than the next guy, quit coming up with new ideas and taking risks. That is, quit being human. People obsessed with economic equality become envious and covet. For them, society is divided into villains and victims. And when they gain control of government, they don’t just “call the cops, they are the cops.”