Wednesday, October 21, 2015

Income Disproportionality

It's unfortunate that income inequality has become a rallying cry of progressives because, as far as I know, nobody is advocating income equality. That would mean everyone gets the same amount, penny for penny. Wealth inequality is a similarly misleading term.

In fact, according to survey results I just made up, most Americans favor a merit-based system. That means people get rewards according to how good they are. This, of course, leaves open the tricky question of what we mean by good, but we can ignore that for now. As with art, I can't define good, but I know it when I see it. Or at least, I know bad when I see it. I'm sure we can all think of examples of bad behavior by people. If not, spend more time on Facebook.

There are two problems with our current system:
  1. In general, the people who get the most (i.e., make the most money) are not the people we would consider good, and
  2. The differences in income (or wealth) are way out of proportion to the supposed worth of the people who make/possess it.
Consider that the CNN Money list of of richest recording artists is topped by Madonna and Paul McCartney, at about $800 million and $660 million. And, again according to CNN Money on the American middle class, the average net worth for middle class Americans is about $300,000. In other words, Paul McCartney is worth more than two thousand times what you are! Two thousand!

And if that's not enough, according to Forbes, Laurene Powell Jobs, whose main accomplishment was marrying the guy who came up with tiny music players to listen to Madonna and Paul McCartney, is worth about $20 billion. In other words, she's worth 30 times what Paul McCartney is worth. Or about sixty thousand times what you're worth. Think about that. Steve Jobs' widow is worth an entire football stadium of you.

If you further scan down the Forbes list, you'll see a lot of familiar names. Apart from Forrest, Jacqueline and John Mars, whose fortunes all derive from candy, the bulk of these are business people … Wal-Mart, Microsoft, Apple, Amazon, Facebook, Google, etc. Sure, these are all interesting businesses, but what's their real value to society? When disaster strikes, an earthquake or a hurricane or a mine collapse, do we say: “Hey, we'd better get Apple guys in there so the victims can listen to iTunes!” Or “Quick! Let's upgrade them to Windows 10!”

Maybe I'm just weird, but if I really separate the value that people bring to the world from the amount of money they make, it seems obvious that the most important people in society are teachers, who help shape what kinds of people our children will become. Emergency responders … police, firefighters and medical personnel, who help get disasters under control and save lives. Authors and artists and musicians, who enrich our lives and help us share our common human experience.

Oh, and hedge fund managers.

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