Like your phone? Like the gap.

Monday, September 16, 2013

In a piece debunking some of the myths used to justify anti-trust and other regulatory schemes, John Tamny of Forbes makes a very good point about "wealth inequality". First, by way of context, Tamny relays an account illustrating how difficult life could be for businessmen trying to close a deal -- at the last minute, while on the road, and in the days before cell phones:

Desperate to get [announcer Don] Meredith signed [for the next season of Monday Night Football], [ABC executive Irwin] Weiner's troublesome situation was exacerbated by the fact that he wasn't in the office due to a wedding in New Jersey that he was attending with his family. Lacking a communication device, Weiner improvised. As Marc Gunther and Bill Carter reported in their 1988 book Monday Night Mayhem, he stopped "frequently at gas stations along the way to call Meredith's lawyer. Weiner, Meredith, and the lawyer spent the whole day going back and forth on the telephone until they finally closed the deal on Sunday night."
Ugh. But fast forward a few short decades:
To think about what a nightmare it was for Weiner to periodically stop to find payphones is to be reminded of how very small and economically bankrupt is the whining by emotional economists about the alleged horrors of "income inequality." Over the next 30 years visionaries like Craig McCaw and Apple Inc.'s Steve Jobs became billionaires for making wireless cellphones commonplace, and while their success surely expanded the "wealth gap" that so concerns hysterics such as Robert Reich and Joseph Stiglitz, their genius massively shrunk the lifestyle gap. Weiner was certainly a member of the much reviled "1 Percent" in 1982, but much like the other 99 percent, he had to access payphones to call people when he wasn't in the office. Thirty years later, and thanks to a wrongly lamented wealth gap, wireless phones are the picture definition of quotidian. [links and stock quotes dropped]
Notice how meaningless a wealth gap can be in terms of an individual's capabilities in the context of a capitalist economy. Indeed, it is borderline ironic that the very people who have lifted so many to new heights through their hard work merely get money for their trouble. That they see some kind of reward for their effort is the very least that justice demands.

Tamny is right that redistributionist demagogues who use wealth inequality to justify their schemes are "economically bankrupt", but he should have gone further: They are also morally bankrupt.

The missing context behind the wealth gap (that Tamny supplies) is exactly what people need to see in order to realize that the gap is often earned, and that they should be ashamed of siding with anyone who would seek to eliminate it. Redistribution of wealth implies theft of wealth, but champions of such schemes rarely get called on that fact. Stories like this, being easy for anyone to relate to, can help rectify that problem.

-- CAV


Steve D said...

‘...the height of folly for anti-trust lawyers at the Department of Justice to presume to decide which companies should be allowed to merge and which should be broken up...’
Folly? Probably. Immoral? Definitely.

Even if they could decide correctly, it would change the fact that they shouldn’t.

Gus Van Horn said...

The fact that they decide isn't established by any right. It also sets the precedent for the public to be bound by any future bad decisions made by the government, and (along with countless other similar measures) cultivates a mentally lazy populace that waits for government edicts, rather than thinking for themselves.