The Fallacy of Income Inequality

By Steve Feinstein

 

There was a delicious ditty in the news a few months ago about how the world’s wealthiest 62 persons own more assets than half of the world’s population:

Last year, just 62 individuals held wealth equivalent to the amount owned by 3.6 billion people, about half the world’s population. That’s according to a new report by Oxfam published ahead of the World Economic Forum in Davos, which aims to show just how deep the gulf of inequality has become.

Ah, the canard of so-called “income inequality.” The feeling by liberals -- especially American Democrats -- that greedy conservatives are hoarding too much of the world’s finite wealth for themselves, thereby denying the hard-working Average Joe and Jane (particularly Jane) of their right and ability to earn a fair middle-class wage.

If Bill Gates or Warren Buffet -- no, wait, not them; they’re liberal, so they’re ok -- if the Koch brothers didn’t selfishly stockpile all that money for their own coffers and instead “paid their fair share,” then that extra taxed money would somehow miraculously find its way directly into the pockets of the “deserving,” and income inequality would be a thing of the past.

“Income inequality” is an artificial, contrived term that has no meaning at all in the real world. The relative income of any two persons is irrelevant. Bill Gates’ next million in income does not take food off my table or negatively impact on my ability to live my life. Conversely, if Gates were to see his income reduced, that reduction would not redound to my direct financial benefit in any way whatsoever. Our two financial situations are unrelated. Unrelated. If some random person hits the Powerball lottery and becomes an overnight half-billionaire, their stroke of financial fortune does not negatively impact me at all, despite our newly-created “income inequality.” So go ahead. Win the lottery.

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