Is Income Inequality Immoral?

[Era Might]

To put it another way, I'm sure people in the middle ages thought feudalism was the most efficient way to distribute resources, too.

[add]

http://www.youtube.com/watch?v=SMwZsFKIXa8

[4588686]

To put it another way, I'm sure people in the middle ages thought feudalism was the most efficient way to distribute resources, too.

 

 

And were he born in that time Socrates would be explaining the nobility of being high-born and the righteous duty of those of aristocratic birth to manage the lives of the squalid peasants and he'd be complaining of the decedent merchants trying to usurp the natural order God has created with their filthy commercialism.  

[4588686]

Sort of  like the old Soviet Union, where "people pretended to work, and the government pretended to pay them."

 

 

Look no further than the old Communist regimes, for a real world example of a policy of enforced equality of income.

True equality of conditions is impossible to achieve (and after all, even in the "classless society" of Communism, some animals are more equal than others), and policies to forcibly redistribute wealth always end up impoverishing most.

 

 

The problem of centrally planned economies was much more the lack of a decentralized pricing system than the relative material equality of the citizens.  It was actually conservatives like Heyek who pointed out the role of prices in disseminating information in a system. Sweden has much greater income equality and a very efficient economy.  The legitimate point you are trying to make is the perverse incentive structure which developed in the Soviet Union.  That wasn't exactly due to general material equality of the people so much as the Soviet Union's need to reinvest any benefits from increased productivity into investment in heavy industry.  

[Socrates]

By wealth I mean creation generally. There are two different contexts here: the economic system, and the world. They are not synonymous, and making them so is problematic in too many ways.

 

Capitalism is problematic precisely because its wealth is divorced from reality. "Wealth" becomes a private concept, rather than something inherent in nature, which we borrow. The world does not exist to enrich us. The idea of "resources" is part of an industrial system, not part of the world itself. In order to justify the material conquest of the world by the strong, it has to be fit into a systematic, abstract mythology of wealth and industry.

 

I disagree that capitalism "is the most effective and efficient system for the creation and distribution of material wealth," given the subhuman poverty experienced in so many parts of the world. The system benefits the system, it is efficient for those who know how to play within the system. It's like a game, the rules are an artificial terrain.

 

The world does not exist to enrich anyone, but to nourish everyone. I happen to like many aspects of capitalism, in the context of the system. But I never confuse the system with reality, anymore than the Matrix is reality. And I do not dismiss other forms of organizing the world, which may not work within our system, but that does not necessarily discredit them.

 

Thus far in history, capitalism has created a godless society (and I mean that in a literal sense, not even the ancient pagans were godless). Capitalism has efficiently enriched and benefited those within the system, but it has also created a new world order not rooted in nature and humanity, but in wealth. Capital has no values, no role in nature, it follows wealth and opportunity, and society is reshaped by those pursuits.

 

Capitalism has proven a beneficial economic system, but it has not proven a human success story. It's too early, really, to draw any real conclusions. Our new world order is too new, and has failed to accomplish what simple nature accomplishes: give shelter, food, and a few happy years to all men. It has certainly had its positive benefits, but to base my worldview on it? That is going too far. Societies of the past have lived very happy socialistic lives. Modern industrial socialism / communism is pretty much proven a failure, but that is simply its modern form, which, like Capitalism, is too much of a meteor in history thus far to draw any real conclusions.

 

 

To put it another way, I'm sure people in the middle ages thought feudalism was the most efficient way to distribute resources, too.

 

The central error here is that a free market economy (which is what I advocate, as opposed to our current heavily state-involved system) is not some clever "system" of centrally-planned distribution of resources, which will be rendered obsolete by advances in economic engineering, but rather the absence of centralized government planning and interference in free economic interchanges.

(Though I myself probably contributed to this misconception by referring to it in my previous post as a "system.")

 

Free market economics is built around the truth that the countless myriad human interactions and interchanges that make up what we call "the economy" is simply far too vast and complex to be successfully controlled by any person or group of persons, regardless how smart, and that free and voluntary exchanges between persons is by far the most effective means of ensuring prosperity and the creation of wealth.

 

(For a brief, entertaining, but very effective illustration of this principle, you should read Leonard Read's 1958 classic, "I, Pencil," telling of the immense number of complex interchanges and processes involved in the manufacture of a simple pencil.)

 

This isn't just an academic theory, as there is a proven correlation between the economic freedom of a society and its economic prosperity.

 

No, in this fallen world things are not and never will be perfect, even under the best economic conditions, and the free market economy will not create a utopia.  But it has vastly increased the amount of material goods in the world.  The parts of the world plagued by massive poverty and starvation are not those with flourishing free market economies, but places with little freedom.

 

As for "capitalism" "creating a godless society," I'm afraid you give entirely too much credit to "capitalism."  A free market economy is simply the free exchange of goods and services.  In itself, it does not make anyone godless (Carnegie and many of the other major "capitalists" and industrialists of the 19th century were in fact devout believing Christians.)  Nor does a free market economy force anyone to be greedy.  The problem is materialism, rather than a free economy.

 

Blaming free market capitalism for a godless society smacks of economic determinism, and would seem to imply that if the only the government interfered in economic transactions in just the right way, it would somehow make people godly and religious.

It doesn't seem to me that less "capitalistic" and more socialistic societies are as a rule any more religious than "capitalist" societies, nor has our country's increasingly socialistic direction made it any more god-fearing.

[Era Might]

The central error here is that a free market economy (which is what I advocate, as opposed to our current heavily state-involved system) is not some clever "system" of centrally-planned distribution of resources, which will be rendered obsolete by advances in economic engineering, but rather the absence of centralized government planning and interference in free economic interchanges.

(Though I myself probably contributed to this misconception by referring to it in my previous post as a "system.")

Free market economics is built around the truth that the countless myriad human interactions and interchanges that make up what we call "the economy" is simply far too vast and complex to be successfully controlled by any person or group of persons, regardless how smart, and that free and voluntary exchanges between persons is by far the most effective means of ensuring prosperity and the creation of wealth.

This sounds nice, but it is a complete fantasy. Capitalism, or the free market, whatever you want to call it, does not exist in a power vacuum. Companies fill that vacuum very quick, and are constrained by government. Your conception of economics is a matter of "the creation of wealth." Anywhere money is the engine, corruption and power are not far behind. Traditionally, economics was a special of moral philosophy, not "the creation of wealth." The idea of a "free market" as some anarchic, spontaneous, non-system is a charming dream, but it's not reality. It does not square with the dead bodies left in the wake of the rise of capitalism / industrialization.

 

I happened to read this today, about a study done on the Protestant Work Ethic:

 

Dr Becker used data from 19th Century Prussia and looked at 450 counties. He found that educational attainment was higher in Protestant areas and there were more people working in services and manufacturing, rather than agriculture. He also found a larger income gap between those in Protestant areas and those in Catholic areas.

He said: “We looked at Prussia in the 19th Century because this was the society that Max Weber was born into. Religiosity was also more pervasive at this time. It seems religion was the main driver behind education differences, Protestants were more encouraged to go to school and read the bible, and this higher level of education translated into higher incomes than their Catholic neighbours.”

...

 

He said: “It is noticeable that the Northern European countries seem to be doing well to keep their finances in check whereas in Southern European countries such as Spain and Italy, everything is running out of order. I would not say you can attribute this to religion per se, but it certainly had a bearing on the way their respective economies have developed. There is a North/South divide and a popular feeling in Northern Europe that they should not have to bail out their debt-ridden Southern neighbours.”

 

 

 

(For a brief, entertaining, but very effective illustration of this principle, you should read Leonard Read's 1958 classic, "I, Pencil," telling of the immense number of complex interchanges and processes involved in the manufacture of a simple pencil.)

Sounds interesting, I will check it out, but I also suggest you read Robert Pinsky's poem "Shirt":

 

At the Triangle Factory in nineteen-eleven.

One hundred and forty-six died in the flames
On the ninth floor, no hydrants, no fire escapes--

The witness in a building across the street
Who watched how a young man helped a girl to step
Up to the windowsill, then held her out

Away from the masonry wall and let her drop.
And then another. As if he were helping them up
To enter a streetcar, and not eternity.

 

http://www.poets.org/viewmedia.php/prmMID/15479

 

 

This isn't just an academic theory, as there is a proven correlation between the economic freedom of a society and its economic prosperity.

I would frame this differently. There is a correlation between economic liberalism and political liberalism.

 

No, in this fallen world things are not and never will be perfect, even under the best economic conditions, and the free market economy will not create a utopia.  But it has vastly increased the amount of material goods in the world.  The parts of the world plagued by massive poverty and starvation are not those with flourishing free market economies, but places with little freedom.

I don't deny the economic usefulness of capitalism, but my point is that it has very large implications. The capitalism world does not just exist in its little bubble, with no negative impact on impoverished parts of the world (and positive impact). There's a reason why companies have had to develop a sort of "corporate responsibility" approach to business. You can't just send capital around the world and think your capital is a moral good in itself. It has vast consequences.

 

 

As for "capitalism" "creating a godless society," I'm afraid you give entirely too much credit to "capitalism."  A free market economy is simply the free exchange of goods and services.  In itself, it does not make anyone godless (Carnegie and many of the other major "capitalists" and industrialists of the 19th century were in fact devout believing Christians.)  Nor does a free market economy force anyone to be greedy.  The problem is materialism, rather than a free economy.

 

Blaming free market capitalism for a godless society smacks of economic determinism, and would seem to imply that if the only the government interfered in economic transactions in just the right way, it would somehow make people godly and religious.

It doesn't seem to me that less "capitalistic" and more socialistic societies are as a rule any more religious than "capitalist" societies, nor has our country's increasingly socialistic direction made it any more god-fearing.

No, capitalism has not abolished religion, but created a godless society (as it must). There's a difference. It's not a matter of the government interfering or not interfering. Economic liberalism is tied to political liberalism (freedom of speech, separation of church and state, etc). This is why the church was usually on the side against modern societies, and why the yearning for capitalism in other countries is also tied to a yearning for a casting off of traditional forms of political society. China transformed itself in a half century. You are framing "freedom" as some abstract idea, but in fact, it is essentially liberal. The story of modernity is not conservatism, but liberalism...conservative lives on like a zombie roaming around a shopping mall, trying to figure out why nobody will invite them in.

 

The conservative icon of the farmer on his farm has some positive elements, but it is NOT the icon of modernity. A farmer does not have that hunger for MONEY that capitalism is based on. Greed and power are the lifeblood of our economic system...I don't say we can get rid of greed and power, which is why I don't discount systems entirely, but I don't think this is the height of history. I think it is possible to find a better way to live.

[Era Might]

Couldn't edit, here's the revised post, minor edits:

 

 

 

 

The central error here is that a free market economy (which is what I advocate, as opposed to our current heavily state-involved system) is not some clever "system" of centrally-planned distribution of resources, which will be rendered obsolete by advances in economic engineering, but rather the absence of centralized government planning and interference in free economic interchanges.

(Though I myself probably contributed to this misconception by referring to it in my previous post as a "system.")

Free market economics is built around the truth that the countless myriad human interactions and interchanges that make up what we call "the economy" is simply far too vast and complex to be successfully controlled by any person or group of persons, regardless how smart, and that free and voluntary exchanges between persons is by far the most effective means of ensuring prosperity and the creation of wealth.

This sounds nice, but it is a complete fantasy. Capitalism, or the free market, whatever you want to call it, does not exist in a power vacuum. Companies fill that vacuum very quick, and are constrained by government. Your conception of economics is a matter of "the creation of wealth." But anywhere money is the engine, corruption and power are not far behind. Traditionally, economics was a species of moral philosophy, not a separate mechanical "creation of wealth." The idea of a "free market" as some anarchic, spontaneous, non-system is a charming dream, but it's not reality. It does not square with the dead bodies left in the wake of the rise of capitalism / industrialization.

 

I happened to read this today, about a study done on the Protestant Work Ethic:

 

 

 

Dr Becker used data from 19th Century Prussia and looked at 450 counties. He found that educational attainment was higher in Protestant areas and there were more people working in services and manufacturing, rather than agriculture. He also found a larger income gap between those in Protestant areas and those in Catholic areas.

He said: “We looked at Prussia in the 19th Century because this was the society that Max Weber was born into. Religiosity was also more pervasive at this time. It seems religion was the main driver behind education differences, Protestants were more encouraged to go to school and read the bible, and this higher level of education translated into higher incomes than their Catholic neighbours.”

...

 

He said: “It is noticeable that the Northern European countries seem to be doing well to keep their finances in check whereas in Southern European countries such as Spain and Italy, everything is running out of order. I would not say you can attribute this to religion per se, but it certainly had a bearing on the way their respective economies have developed. There is a North/South divide and a popular feeling in Northern Europe that they should not have to bail out their debt-ridden Southern neighbours.” http://www2.warwick.ac.uk/newsandevents/pressreleases/south_debt_crisis/

 

 

 

 

 

(For a brief, entertaining, but very effective illustration of this principle, you should read Leonard Read's 1958 classic, "I, Pencil," telling of the immense number of complex interchanges and processes involved in the manufacture of a simple pencil.)

Sounds interesting, I will check it out, but I also suggest you read Robert Pinsky's poem "Shirt":

 

 

 

At the Triangle Factory in nineteen-eleven.

One hundred and forty-six died in the flames
On the ninth floor, no hydrants, no fire escapes--

The witness in a building across the street
Who watched how a young man helped a girl to step
Up to the windowsill, then held her out

Away from the masonry wall and let her drop.
And then another. As if he were helping them up
To enter a streetcar, and not eternity.

 

http://www.poets.org/viewmedia.php/prmMID/15479

 

 

 

 

This isn't just an academic theory, as there is a proven correlation between the economic freedom of a society and its economic prosperity.

I would frame this differently. There is a correlation between economic liberalism and political liberalism.

 

 

 

No, in this fallen world things are not and never will be perfect, even under the best economic conditions, and the free market economy will not create a utopia.  But it has vastly increased the amount of material goods in the world.  The parts of the world plagued by massive poverty and starvation are not those with flourishing free market economies, but places with little freedom.

I don't deny the economic usefulness of capitalism, but my point is that it has very large implications. The capitalist world does not just exist in its little bubble, with no negative impact on impoverished parts of the world (and positive impact). There's a reason why companies have had to develop a sort of "corporate responsibility" approach to business. You can't just send capital around the world and think your capital is a moral good in itself. It has vast consequences.

 

 

 

 

As for "capitalism" "creating a godless society," I'm afraid you give entirely too much credit to "capitalism."  A free market economy is simply the free exchange of goods and services.  In itself, it does not make anyone godless (Carnegie and many of the other major "capitalists" and industrialists of the 19th century were in fact devout believing Christians.)  Nor does a free market economy force anyone to be greedy.  The problem is materialism, rather than a free economy.

 

Blaming free market capitalism for a godless society smacks of economic determinism, and would seem to imply that if the only the government interfered in economic transactions in just the right way, it would somehow make people godly and religious.

It doesn't seem to me that less "capitalistic" and more socialistic societies are as a rule any more religious than "capitalist" societies, nor has our country's increasingly socialistic direction made it any more god-fearing.

No, capitalism has not abolished religion, but it has created a godless society (as it must). Economic liberalism is tied to political liberalism (freedom of speech, separation of church and state, etc). This is why the church was usually on the side against modern societies, and why the yearning for capitalism in other countries is also tied to a yearning for a casting off of traditional forms of political society. China transformed itself in a half century, but it had to go through a revolution first. Say whatever you want about communism, but it understand the essential point that transforming a society into a modern economic power is a violent change...capitalists just had more benevolent violence. You are framing "freedom" as some abstract idea, but in fact, it is essentially liberal. The story of modernity is not conservatism, but liberalism...conservativism lives on like a zombie roaming around a shopping mall, trying to figure out why nobody will invite them in.

 

The conservative icon of the farmer on his farm has some positive elements, but it is NOT the icon of modernity. A farmer does not have that hunger for MONEY that capitalism is based on. Greed and power are the lifeblood of our economic system...I don't say we can get rid of greed and power, which is why I don't discount systems entirely, but I don't think this is the height of history. I think it is possible to find a better way to live.

 

[Socrates]

 

Couldn't edit, here's the revised post, minor edits:

 

 

 

 

This sounds nice, but it is a complete fantasy. Capitalism, or the free market, whatever you want to call it, does not exist in a power vacuum. Companies fill that vacuum very quick, and are constrained by government. Your conception of economics is a matter of "the creation of wealth." But anywhere money is the engine, corruption and power are not far behind. Traditionally, economics was a species of moral philosophy, not a separate mechanical "creation of wealth." The idea of a "free market" as some anarchic, spontaneous, non-system is a charming dream, but it's not reality. It does not square with the dead bodies left in the wake of the rise of capitalism / industrialization.

 

I'm not sure what you're calling a "complete fantasy."  The gains in material wealth and increases in standards of living in places in which there is greater economic freedom are in fact very real.  The recent Increased economic freedom in countries such as India has brought many people out of poverty and raised standards of living.  There is a rising middle class of people in such countries who can afford cars and homes and computers, who previously could barely afford to eat.  That's reality, not fantasy.

 

Unlike some others on here, I'm not an anarchist, and think some government is necessary to protect property rights and punish outright crimes and abuses, but an economy prospers best when it is based on free exchanges between private parties, without meddling, control, and interference from a centralized government.

 

No, a free market economy won't in itself create some flawless utopia, but it works better than the alternatives.

 

 

I happened to read this today, about a study done on the Protestant Work Ethic:

 

 

 

Dr Becker used data from 19th Century Prussia and looked at 450 counties. He found that educational attainment was higher in Protestant areas and there were more people working in services and manufacturing, rather than agriculture. He also found a larger income gap between those in Protestant areas and those in Catholic areas.

He said: “We looked at Prussia in the 19th Century because this was the society that Max Weber was born into. Religiosity was also more pervasive at this time. It seems religion was the main driver behind education differences, Protestants were more encouraged to go to school and read the bible, and this higher level of education translated into higher incomes than their Catholic neighbours.”

...

 

He said: “It is noticeable that the Northern European countries seem to be doing well to keep their finances in check whereas in Southern European countries such as Spain and Italy, everything is running out of order. I would not say you can attribute this to religion per se, but it certainly had a bearing on the way their respective economies have developed. There is a North/South divide and a popular feeling in Northern Europe that they should not have to bail out their debt-ridden Southern neighbours.” http://www2.warwick.ac.uk/newsandevents/pressreleases/south_debt_crisis/

 

 

 

Interesting, but I'm not sure what point you're trying to make.  Do you regard education/literacy and a greater variety of employment opportunities as negative things?

 

You need to read Thomas Woods' The Church and the Market: A Catholic Defense of the Free Economy.

 

 

 

 

Sounds interesting, I will check it out, but I also suggest you read Robert Pinsky's poem "Shirt":

 

 

Again, not sure how this is relevant to the arguments.

 

 

 

 

 

I would frame this differently. There is a correlation between economic liberalism and political liberalism.

 

 

Depends on what you mean by "liberalism."  It seems you're referring to classical liberalism (which I don't regard as an entirely bad thing), rather than the statist soft socialism which is commonly called "liberalism" in America today.

 

I don't deny the economic usefulness of capitalism, but my point is that it has very large implications. The capitalist world does not just exist in its little bubble, with no negative impact on impoverished parts of the world (and positive impact). There's a reason why companies have had to develop a sort of "corporate responsibility" approach to business. You can't just send capital around the world and think your capital is a moral good in itself. It has vast consequences.

 

 

I don't believe the free market economy abolishes the need for morality.  The truth is that evils, injustices, and abuses exist, and have existed in every form of society and economic system.  They are hardly unique to "capitalism."

 

 

No, capitalism has not abolished religion, but it has created a godless society (as it must). Economic liberalism is tied to political liberalism (freedom of speech, separation of church and state, etc). This is why the church was usually on the side against modern societies, and why the yearning for capitalism in other countries is also tied to a yearning for a casting off of traditional forms of political society. China transformed itself in a half century, but it had to go through a revolution first. Say whatever you want about communism, but it understand the essential point that transforming a society into a modern economic power is a violent change...capitalists just had more benevolent violence. You are framing "freedom" as some abstract idea, but in fact, it is essentially liberal. The story of modernity is not conservatism, but liberalism...conservativism lives on like a zombie roaming around a shopping mall, trying to figure out why nobody will invite them in.

 

 

A true free market economy involves voluntary exchanges of goods/services/money between persons, rather than violent force.

 

And again, you need to define what you mean by "liberal" and "conservative."  As i said, classical liberalism is a different animal from today's socialistic "liberalism."

 

It's also hard to argue with your points, if you never define exactly what it is you are arguing for.

 

The benefits of a free economy and free society are real, whether you wish to label it "liberal" or "conservative."

 

 

The conservative icon of the farmer on his farm has some positive elements, but it is NOT the icon of modernity. A farmer does not have that hunger for MONEY that capitalism is based on. Greed and power are the lifeblood of our economic system...I don't say we can get rid of greed and power, which is why I don't discount systems entirely, but I don't think this is the height of history. I think it is possible to find a better way to live.

 

 

Not sure what your argument is here.  Obviously, farmers exist in a free market economy (and indeed are crucial to any economy.)

 

Greed and lust for power are part of any fallen human society, and are not inventions of "capitalism," all socialist propaganda to the contrary.  They can't be legislated out of existence, or eliminated by granting the state more power and control over economic interactions.  (This simply transfers power from free citizens to the state.)

 

I don't think our (increasingly socialistic) society is the "height of history" either, but I don't think increasing the power of the state over the economy is the solution to our problems, nor will it provide a "better way to live."  

[4588686]

 

A true free market economy involves voluntary exchanges of goods/services/money between persons, rather than violent force.

 

 

 

A market economy required violent force to regulate itself.  That's what property rights are.  It's the state violently enforcing what the powerful dictate ought to belong to them.  Obviously that's a simplification but it's roughly true.  That doesn't make the system of property rights illegitimate but it does point our how silly your presentation of a market economy is.  

[Winchester]

So who is more violent: A man who claims an area of land as his farm, or the later comers who plow under the crops, build houses of ill-repute on top of the cropland, or otherwise change the land?

[4588686]

So who is more violent: A man who claims an area of land as his farm, or the later comers who plow under the crops, build houses of ill-repute on top of the cropland, or otherwise change the land?

Why is either violent?  

[Winchester]

Why is either violent?  

 

You take the position that property is impossible, then?

[4588686]

You take the position that property is impossible, then?

 

 

No.  I think property is possible and, often times, useful.  It's just a social construction which is supported by violence, public or private.  

[Winchester]

No.  I think property is possible and, often times, useful.  It's just a social construction which is supported by violence, public or private.  

 

It's only supported by violence if someone chooses that. Free agreement is also possible. Indeed, it seems to be the norm.

[4588686]

It's only supported by violence if someone chooses that. Free agreement is also possible. Indeed, it seems to be the norm.

 

 

How is it the norm?