We’ve all heard every stereotypical leftist’s favorite catchphrase “the rich get richer and the poor get poorer”. They paint a black and white picture of the luxurious 1% ripping off the common people living nearly in poverty. It’s a devastating dichotomy that skews the truth way too far in favor of excessive government control. The media has consistently pushed a false disparity between the rich and poor in order to create unrest that craves government-instituted “income equality”.
But here’s the truth: a rising tide lifts all boats.
Capitalism isn’t about taking from one group to benefit another. It is the voluntary exchange of services and goods that boosts the wealth of both parties involved. Just by the nature of economics, you will be rewarded adequately based on one’s skill-set, effort, and sheer ability.
When measured as a percentage of the world’s population living on less than $2 a day, the numbers of people in extreme poverty is now less than 10% for the first time in history. In fact, thanks to innovation from western civilization and advances in eastern innovation, we are well on our way to ending global poverty by 2030.
We are the first generation in human history that can end global poverty. But we are so close to losing that to entangling government intervention that hinders the capitalist innovations that have lifted millions out of poverty already. There is income inequality in every society – even in societies such as the Soviet Union and China that were supposed to be utopias for equality. In fact, countries with the most income equality are countries rampant with extreme poverty.
If we allow countries to innovate and the free market to provide solutions to poverty, as the rich get richer through their innovation the poor get richer through an increased standard of living that’s significantly more accessible.
There was a point in American history that only the wealthy elite could afford cell phones, but now 90% of Americans own cell phones – 64% of those being smartphones. 80% of the poorest of poor have air conditioning; however, in 1970 only 36% of the entire U.S. population had AC. About 75% of the poorest Americans have a car, and 31% have two or more.
As the market catches up with innovation, everyone is lifted up not only in terms of income but also in accessibility to things that boost our standard of living.
Big government amplifies income inequality. Sen. Bernie Sanders says, “The gap between the very rich and everyone else in America is wider today than at any time since the 1920s.” However, when you look at the extreme amount of government intervention hindering the growth of American industries, you’ll soon find that big government not only causes a spike in unemployment but also a dip in overall productivity.
But why are the richer getting rich faster than the poor? Yes, the rich have seen their incomes climb in recent years, but that doesn’t mean the poor are suffering as a consequence of their success. The fact is: the rich suffered the most during the last recession. The top earners saw a massive dip in income while the bottom-fifth’s income steadily rose during that period.
The key to lifting everyone up is in marketplace competition because the market rewards those who take risks then the rest of the market catches up. Income equality is not an end-state we should progress towards. We must value equal opportunity over equal income because the only way everyone’s income can be equal is if we all live in a poverty-stricken society with no innovation.
The fact of the matter is that income disparity has existed for centuries, and our current trajectory puts us well on our way to abolishing global poverty within the next few decades — only if we’re free from excessive government control.