Tue, 10 May 2005

The Rich Should Get Richer

You will often hear the left say "The rich get richer and the poor get poorer". They believe this both as a fact and as an ethical judgement. They think that the poor really do get poorer in a market economy. This goes back to the usual "fixed pie" theory of economics. "If you get something, you must have gotten it to my disadvantage." It takes very little examination to see that the "poor" in more-free market societies are much better-off than the poor in societies with less-free markets. Unfortunately leftists are never willing to open their eyes.

The left also mean the first part ("The rich get richer") as an ethical judgement. Even if the poor got richer as well, the left would still believe it wrong that the rich get richer. While you can make any ethical judgement you want, you should be aware of the effects of your judgement. Ethical judgements (for the worse) are intended to reduce the amount of the thing judged. That is, the left believe the world would be better if the rich didn't get richer.

But the rich should get richer in a free market society. There is no way to get rich in a free market society except by convincing people that you have something they want. Thus, people who have learned to be helpful should be encouraged to continue to be helpful. There's plenty of evidence that, having created valuable goods once, they will do so again in the future. Thus, the rich ought to get richer.

Note for the unwary: the USA is not a terribly free market society in an absolute sense. It is merely much more free than most. Thus, if you want to look for examples of non-freeness in which private parties gain from political manipulation, you will find many of them in the USA. Some people are rich not because they were helpful, but because they were skillful at manipulating politics. That doesn't invalidate the idea of free markets. Rather, it endorses the idea of reducing the centralization of power. Power can be used for good or evil, but it's usually used for evil. Better not to concentrate it.

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