In Part One I agreed with Sen. Bernie Sanders (D-VA). We have an income inequality problem. Where we disagree is I differentiate inequality created by consumer demand and individual decision (moral) from inequality created by government regulation in violation of rule of law (immoral).
Donald Boudreaux, an economist at George Mason University reminds us differences in wealth don’t necessarily translate into differences in living standards. One thing we do know despite Ms. Swift earning an income three hundred times greater than mine is that she does not enjoy three hundred times the government services, consume three hundred times the calories, enjoy meals three hundred times better than what is on my table nor is she likely to live three hundred times longer.
“Win-Win” not “Zero Sum”
Miss Swift’s income is a direct result of folks like you and I freely choosing to exchange our money for her music because in our pursuit of happiness we value her music more than having those dollars in our wallet. We call this a “win-win,” not a “win-lose.” Both Taylor and I are better off after the purchase. In a true free market one does not win at the expense of his neighbor. Both are winners.
The truth is everyone of us is culpable for the income inequality that exists. When we choose to purchase Swift’s “Shake It Off” instead of Jimmy Buffet’s “Wasted Away in Margaritaville” we create inequality between the two musicians. That’s right, the guilty one is looking at you in the mirror. Every purchase we make creates “winners” and “losers” as we send messages to the marketplace about the products and services we value most and direct the market how to best allocate scarce resources.
Some of the smartest people in America confuse concerns about the poor with concerns about the assets the wealthy control. I think it’s rooted in outdated zero-sum thinking—the idea that if a poor guy doesn’t have it, it’s because the wealthy guy does. One person is only better off at the expense of another under crony capitalism, not under conditions of honest entrepreneurship and free exchange. Miss Swift did not increase her wealth at the expense of millions of teenage girls. On the contrary, millions find themselves happier because of the purchase of her music.
Though Taylor Swift and I are equals under the law we are not equal in talent (add Phillip Rivers for that matter). To deprive Taylor Swift of her income would deprive millions of the happiness they derive from owning her music.
I am going to wager that Taylor doesn’t keep her millions under her mattress, but deposits her income in a local bank and invests in the market. Her savings become loans to the nurse in Clairemont struggling to purchase her first home and to the young man in Kensington starting his small business.
Depriving Taylor Swift of her income not only short circuits her incentive to create and bring happiness to others but it undermines the most effective economic engine the world has seen for creating economic opportunity for the poor. To deprive Ms. Swift of her income is to deprive her of the means to hire more workers as well as to deprive the market of the labor demand her purchases create.
Next is Part Three – Income Inequality Created by Individual Choice
Eric Andersen is a member of the Central Committee of the San Diego County Republican Party and is the Co-Founder of the Republican Liberty Caucus of San Diego County and im2moro.com. He is a former Rock Church Citizen of the Year.