Why Inequality is Not Unjust

     A commenter over at the Ace of Spade HQ, Serena, posted a response she received to the question “How does being a billionaire ‘harm society’?

     Below is a copy of that response interleaved with some comments:

“Another great question. Billionaires (even the ones who just have money sitting there, and “earned” it legally) harm society because they create something very dangerous for economies – inequality. Most of the world has too little, billionaires have too much. That kills jobs and shifts the executive/social/political power to cater to a powerful class of individuals that got there not just with hard work, but unfortunately, often by chance, and with lots and lots of greed. “

     Ah, the great boogie-man of the Progressive Left: “Inequality.”  It is never stated why some people having more wealth than others is somehow necessarily bad.  The response seems to suggest that “[m]uch of the world has too little” because those icky billionaires hoarded it all in their three cubic acre moneybins.

     This ignores the fact that wealth is not a zero sum game.  Wealth is created, and some will create or accumulate more than others.  Someone having a lot of wealth does not preclude others creating wealth for themselves, and almost invariably, for others as well.

“Wealth acquisition isn’t wrong, until it’s a disproportionately gigantic amount of wealth. Take Mexico, lots of poverty, but half a dozen guys have hundreds of billions. If those guys hadn’t accumulated that much, wealth would be more distributed in Mexico, which means more money circulating in the hands of a lot more than half-a-dozen, and being used to exchange products the poor and middle class need. “

     If those billionaires hadn’t worked to build up that wealth, there would be no wealth to be distributed to the poor.  Nor is wealth simply being hidden away.  Luxury items have purchased from others, with those others making a profit, and subsequently investing or spending that money that increases the wealth for those non-billionaires.

     Nor does the rich having a lot of money prevent anyone from making products that the poor and middle-class need.  Indeed, many of these billionaires made their money founding or running companies that make those very products the poor and middle class need, as well as items they merely want.

“It’s only ‘honest’ property because, as a society, we have never thought clearly about these problems, and we never decided when too much wealth accumulated in just 1 person is too damaging for society.

“When you work and get paid by a private business, your profit is negative. You are getting paid less than the value your work generated to the corporation. That difference between value generated and your paycheck is your boss’s profit. So to generate a LOT of profit, you need to pay a LOT of people much LESS than what they generated, for a LONG time. They might not know it, and be thankful for is worth more.”

     Certainly, a worker in dire straights may have to work for far less than they feel their labor is worth, but nonetheless that fact that they are choosing to expend their labor for pay shows the value of that pay to the worker.  Similarly, an employer may be forced to pay for someone with a rarefied talent or product more than they feel that talent or products is worth, but nonetheless choose to pay for that talent or labor because that pay shows the value of the talent or product to the employer.

     But to carry that thought further wouldn’t the company selling goods and services be making a “negative profit”? Isn’t the company getting paid less than what the goods or services it sells is worth?

“What’s evil is convincing yourself that profit is your claim alone, when it contains the blood, sweat and tears of thousands of people who worked hard and didn’t get even having a job (that’s how desperate people have become). But if workers knew the real numbers, most of them would be outraged, because paychecks are not enough these days, just like the number of jobs is scarce.”

     As Richard Feynman said: “That’s not right; that’s not even wrong.”

     If you work for a business, your profit is not negative.  It is positive for both you and the business.  Your work is more valuable to the company that the money it pays you.  So yes, the company does make a profit because you are getting paid less than the value of your work generated from the companies perspective.  If it wasn’t they wouldn’t hire you.  But then, from your perspective that money is more valuable to you than your labor, so from your perspective, it is the company that is running a negative profit.  Each side trades what, for them, is worth less for something, for them, that nearly enough for the outstanding value they created. This tendency is getting worse and worse, and less and less people get the chance to become billionaires like mr. Branson. In the process, the majority of the middle class is slipping into poverty.”

     The “blood, sweat and tears” of the workers hold no claim on the profits of the company.  Their share of the wealth creation was already given to them in the form of wages.  The workers already took their fair share, and the rest of the profit is the share going to the owners of the company, and everyone else who contributed money, work, property, &c.

     The free market is nothing more than the free interaction of free individuals  for their mutual benefit.

     But would “equality” be achieved if everyone had the same wealth?  As a matter of fact, real inequality of power would occur.  In order to create “equality,” the state (or state-equivalent as far as Anarcho-Syndicalist are concerned), would have to have the power to take everything away from you, and then have the power to distribute it.   In effect the state must have total power over you, far more than any billionaire could.

     And the power of the state is not something that everyone would control equally.  At best there would be an Ochlocracy with those good at persuading the mob having more power than the targets of said mob.  At worst you create a Nomenklatura, with an inequality that puts makes the power difference between a king ruling by divine right and a serf to seem downright egalitarian.

     Perhaps, Margaret Thatcher said it best:

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