John Goodman from Townhall writes A Personal Note on Inequality:

First, I made a rough calculation that between 5% and 10% of our class was earning about half the class income. Obviously, my calculation was far from precise, but I believe that the inequality of income within my high school class was similar to the inequality we observe in society as a whole.

Second, I have no idea why this happened. The highest earners in my class were not necessarily the ones with the highest grades or test scores. They were not the ones I would have predicted if I were making such predictions when I was young. A few of my classmates had the opportunity to enter their fathers’ businesses and I suppose this gave them a leg up. But this was less than 10% of the high-earner group. Also, just about everybody who is doing well got there through hard work and perseverance. None of my classmates won the lottery.

Fourth, I don’t know anyone in my class who thinks the distribution of class income is unfair. If you read Paul Krugman, Joe Stiglitz and similar commentators, you get the feeling that they think some great injustice has been done to create inequality in society as a whole (but without ever saying what that injustice is). My class includes Democrats and Republicans, liberals and conservatives, and a few libertarians like myself. But I’m pretty sure that regardless of political beliefs, no one in my class thinks that what their classmates are earning is the result of some general unfairness.

Finally, I don’t know anyone in my class who regards this as a problem that needs correcting. If we were to have an expensive reunion that couldn’t be paid for with normal fees, I’m sure that those who have more would chip in and underwrite the expense. But that would be voluntary and everyone would expect it to be voluntary. It’s noblesse oblige.

Here is my theory. Our basic notions of what is fair and unfair and which problems need correcting and which ones don’t are actually very similar when we are talking about people we all know. It is only when we are talking about abstractions and amorphous groups of people – people that we don’t know – that political ideologies pull us apart.

From the Pittsburgh Tribune Review Donald Boudreaux writes Questions for redistribution’s proponents
Excerpts:

• Do you teach your children to envy what other children have? Do you encourage your children to form gangs with their playmates to “redistribute” toys away from richer kids on the schoolyard toward kids not so rich? If not, what reason have you to suppose that envy and “redistribution” become acceptable when carried out on a large scale by government?

• Do you not worry that creating government power today to take from Smith and give to Jones — simply because Smith has more material wealth than Jones — might eventually be abused so that tomorrow, government takes from Jones and gives to Smith simply because Smith is more politically influential than Jones?
Read more: http://triblive.com/opinion/donaldboudreaux/5283716-74/jones-smith-income#ixzz2qBcAq5qd
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HKO:
when we consider redistribution we usually refer only to monetary wealth.  But what about leisure time?  Wealth is often measured by how much free time one has, yet many of the wealthy sacrifice valuable free time and time with their family in order to acquire their material wealth.  If their wealth is over taxed they will simply switch to more leisure time and produce less.  Another form of wealth is power and the distribution of power has far greater consequences to our our social fabric than the redistribution of mere dollars.

Charles Koch

Daniel McCoy interviews Charles Koch for the Wichita Business Journal

I think one of the biggest problems we have in the country is this rampant cronyism where all these large companies are into smash-and-grab, short-term profits, (saying) how do I get a regulation, we don’t want to export natural gas because of my raw materials … well, you say you believe in free markets, but by your actions you obviously don’t. You believe in cronyism. And that’s true even at the local level. I mean, how does somebody get started if you have to pay $100,000 or $300,000 to get a medallion to drive a taxi cab? You have to go to school for two years to be a hairdresser. You name it, in every industry we have this. The successful companies try to keep the new entrants down. Now that’s great for a company like ours. We make more money that way because we have less competition and less innovation. But for the country as a whole, it’s horrible.

And for disadvantaged people trying to get started, it’s unconscionable in my view. I think it’s in our long-term interest, in every American’s long-term interest, to fight against this cronyism. As you all have heard me say, the role of business is to create products that make people’s lives better while using less resources to do it and making more resources available to satisfy other needs. When a company is not being guided by the products they make and what the customers need, but by how they can manipulate the system — get regulations on their competitors, or mandates on using their products, or eliminating foreign competition — it just lowers the overall standard of living and hurts the disadvantaged the most. We end up with a two-tier system. Those that have, have welfare for the rich. The poor, OK, you have welfare, but you’ve condemned them to a lifetime of dependency and hopelessness. Yeah, we want hope and change, but we want people to have the hope that they can advance on their own merits, rather than the hope that somebody gives them something. That’s better than starving to death, but that, I think, is going to wreck the country. Is it in our business interest? I think it’s in all our long-term interests. It’s not in our short-term interest. And it’s about making money honorably. People should only profit to the extent they make other people’s lives better. You should profit because you created a better restaurant and people enjoyed going to it. You didn’t force them to go, you don’t have a mandate that you have to go to my restaurant on Tuesdays and Wednesdays or you go to prison. I mean, come on. You feel good about that?

HKO

The increase in cronyism correlates strongly to an increase in the size and scope of government.  The more areas of our commerce and our lives the government seeks to exercise control the more that business have to game the system to survive.

Neither party pays more than lip service to cronyism but this issue will have great attraction to many voters. This disturbs the true sense of fairness- equality before the law, not fairness as the right to the fruits of someone else’s labor and sacrifice.

This is why the case for shrinking government is not just rational and effective but moral.

tips to Carpe Diem

“This was all the more regrettable because, in a crony capitalist system, the huge gains of the few really do come at the expense of the many. There was an irony here. Perhaps Marx had been right all along! It was just that he was describing a crony capitalist, not a free price system, and his most devoted followers set up a system in the Soviet Union that was cronyist to the core.”

“A free price system is not what economists call a zero sum game, in which existing wealth simply changes hands. On the contrary, it continually creates new wealth, large amounts of new wealth, and everybody potentially benefits. A cronyist system by contrast is a negative sum game; it destroys what wealth exists without creating much new wealth to replenish it.”

Excerpt From: Lewis, Hunter. “Crony Capitalism In America.” AC2 Books. iBooks.

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“The cell phone’s radical evolutionary improvement happened only because people had the right to walk away from devices and service providers that did not satisfy them. It seems an obvious point, but it is one that is often overlooked and misunderstood. We talk about technological progress as though Moore’s law were an immutable law of thermodynamics, as though technological development just happened, a force of nature like a flood or a tadpole becoming a frog. But that is not the case. If you make a chart of the world’s per capita GDP from A.D. 1 until now, you will see a flat line that lasts for the better part of two thousand years. And then the line goes vertical around 1750. “For the first time in history,” writes economist Robert Lucas, “the living standards of the masses of ordinary people have begun to undergo sustained growth. . . . Nothing remotely like this economic behavior has happened before.” Something changed in a few years, and it wasn’t the people. It’s not like we were monkeys in 1749 and Ben Franklins in 1750. All of the ingredients of the Industrial Revolution had been in place for years. We already knew how to make iron, build machines, and burn coal, and we’d been printing books with movable type since the fifteenth century, so such knowledge as there was could be distributed. Trade played a role, but there had been global trade for centuries before that.”

“The main change was that English people won the right to say no, and what they said no to largely was a lifetime of farmwork. They exercised a literal right of Exit, leaving the farms for the factories and the cities, or even for the colonies or the frontier. A two-thousand-year period of economic stagnation was broken in a matter of years, and the world was changed. We can do that again.

The power of Exit does not come only from political or contractual arrangements. It can come from informal social norms, and even from hard physical factors such as geography. The economist Arnold Kling argues that what kept the United States so remarkably free in its early days was not the presence of the Bill of Rights, but the presence of the frontier. The energetic, entrepreneurial people most likely to bridle at political restrictions had an out: lighting out for the territories.”

Excerpt From: Kevin D. Williamson. “The End Is Near and It’s Going to Be Awesome.” HarperCollins, 2013-05-01. iBooks.

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