Lowering Income Inequality

There are ways to lower income inequality without abandoning capitalism

By Christopher Cunningham

Tim Baldwin and Joe Carbonari recently wrote in the Beacon on statements made by Rand Paul concerning income inequality in our country. Building on their thoughts – and overlapping with them a little – I think it is important for people to understand that capital conveys competitive advantages and disadvantages to us in complex ways.

Capital takes forms like cash, physical tools, buildings, credentials, knowledge, personal relationships, networks of contacts, social statuses, qualities of character, and more – it is any asset useful for accumulating more assets. Society is full of competitive little arenas each of us passes through every day and, based on what kinds of capital one brings with them, she or he acquires either privilege or deprivation in competing to seize upon attractive opportunities.

Rand is right in that personal initiative often elevates us in status and brings about success but he also oversimplifies how social conflict plays out in the real world. We do not have a level playing field. Moreover, our social environs affect us in ways beyond our abilities to completely control. Some people are unlikely to flourish regardless of their work ethic unless the government guarantees health services, infrastructure, education, etc.

There are ways to lower income inequality without abandoning capitalism, though I look to market socialism instead. A basic income could put a floor on earnings – limiting how deprived one can be of means to personal development. Workplace democracy, use of co-ops, and regulation of compensation can decentralize economic power and add a ceiling for how much privilege and influence relative to others economic elites enriched by capital can accumulate.

We will never have a classless society yet for the benefit of all we should cultivate dignified living conditions, actionable freedom, and quality access to the kinds of opportunities needed for fruitful pursuits of happiness.

Christopher Cunningham

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