The statists are making a big issue out of income inequality, hoping to convince ordinary Americans that redistribution is their only hope for a better life.
I’ve explained with a pizza analogy that this is horribly misguided because it falsely assumes the economy is a fixed pie.
Simply stated, it doesn’t make sense – or help anybody – if inequality is reduced by policies that hurt everyone, but happen to hurt upper-income people more than lower-income people.
Moreover, redistribution tends to create a “poverty trap” as people get seduced by dependency.
That’s why I’ve argued that economic growth is the best way of helping the less fortunate.
But I have to admit that Margaret Thatcher does a much better job of eviscerating the left’s agenda on this issue.
While it’s inspiring to watch Thatcher in action, it’s also painful to realize that the current crop of GOP presidential candidates seems generally incapable of making similar arguments. Can you imagine, for instance, Mitt Romney making these remarks?
Last but not least, Thatcher’s remarks remind me about Churchill’s famous quote, which is very appropriate for this discussion.
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.
And if you want real-world examples, look at this chart comparing North Korea and South Korea, or this chart comparing Chile, Argentina, and Venezuela. Now ask yourself a simple question: Which societies have generated more prosperity and higher living standards for ordinary people?
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