Charles C. Milliken: Rising prosperity, rising inequality
Last week, I discussed one of the major woke causes, “equity,” defined in neo-Marxist terms as equality of results. I also showed how the “cure” for this social disease was government redistribution of income, which, ironically since that discourages work, makes the problem – if it be a problem – worse. Let me be crystal clear here – income inequality (to be carefully distinguished from poverty) is not a social or human problem, it is a political opportunity because it uses greed and envy to pit different groups in society against each other to secure electoral advantage.
This week, I’d like to point out how income inequality will not go away in an increasingly wealthy society (unlike poverty, which does go away) and cannot ever be “cured” no matter how hard the left pretends to have a cure. In fact, the left doesn’t want a cure, because if somehow income inequality disappeared, they would lose one of their perennial electoral issues.
Consider our nation in 1870. Poorer than today, with less income inequality, although inequality has existed since the dawn of recorded history. A typical house had no electricity, no running water, no central heat, no screens on the windows, no washer, no drier, no refrigerator, no nothing that runs on electricity. Then, in an average lifespan, by 1940 our nation had changed beyond recognition. In the next lifespan – and within living memory – 2010 saw still more marvelous improvements, but if we had to live in 1940 our essentials would be met. If we had to live in 1870, we’d think we’d been transported to hell.
So how did this vast improvement take place? A handful of bright, resourceful, ambitious and often ruthless individuals got themselves filthy stinking rich by making ordinary lives unbelievably better. The familiar “Robber Barons” – Carnegie in steel, Rockefeller in oil, Edison in electricity, Bell and the telephone, Vanderbilt in railroads, and dozens more. Most of them represented the classic Horatio Alger story of rags to riches through pluck and luck. Most of them made cheap stuff available to the masses, and made stupendous fortunes on the basis of selling millions of items at a small profit each. (Sam Walton, skipping ahead a century, made billions the same way.) In fact, the way to great fortunes is usually making some improvement in life available more cheaply than before, or some new thing, and selling it by the ton. Great fortunes are not ordinarily made by catering to the rich.
Now that the rich are accounted for, what about the rest of us? As I said before, ambition is one of those attributes also quite unevenly distributed. As wealth and well-being dramatically improved among the less-well-off, it became possible to live much better on less effort. Think of a typical housewife in 1870, not wealthy enough to afford a servant, what kind of hours she had to put in to keep a family home functional. How many tons of water would she have to haul – in and out – in order to do laundry and clean and cook and everything else running water and indoor plumbing made possible. Her husband’s real income was rising, sometimes by fits and starts, but on average year after year ever higher.
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All of a sudden, vistas opened up heretofore only dreamed of. Leisure time! Recreation! Travel. A child born in 1870 grew in a world profoundly different from his parents. And another vista opened up heretofore essentially unthinkable: retirement. Rising household wealth meant you didn’t have to work until the day you dropped dead in order to keep eating. Rising wealth meant decreasing child labor necessary to help support the family. The kids went to school.
What effect did this have on inequality of income? It increased, since people who retire, or delay working, don’t earn money. Workforce participation, on average, has been declining for the past 150 years, and shows no sign of stopping. Contentment has become a chief driver of inequality, and we can only hope the left does not “cure” it.
Charles Milliken is a professor emeritus after 22 years of teaching economics and related subjects at Siena Heights University. He can be reached at milliken.charles@gmail.com.
This article originally appeared on The Daily Telegram: Charles Milliken: Rising prosperity, rising inequality
