Name: Income Inequality is Good
Uploaded: 2018-10-19T02:16:00.000Z
Duration: 4 min 39 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

There has been a lot said and a lot written
about income inequality – about how unfair

Adverbs of degree

it is that a few people are very rich and
the rest of us aren't; that the income gap

between the wealthy and even the middle-class,
let alone the poor, is so large.

There's only one problem with this complaint.

Income inequality is actually a good thing
-- when it is the product of a free market economy.

An economy is made up of millions of individuals
making decisions about their own lives

– where and how much they want to work, what they
want to buy, and so on.

In a country like the United States, you are
free to pursue a path in life that you believe

That talent might be teaching, or making music,
or banking, or starting a small business,

Whatever it is, this freedom helps to make
life enjoyable, exciting and meaningful.

But it's also an expression of inequality.

This is simply because we're all different.

We have different talents, different temperaments,
different ambitions.

That's okay because – again in a free
society – we can seek out opportunities

that play to our personal strengths; that
distinguish us from others.

If you find what you're really good at and
work hard, you might have

If you're an outstanding athlete, I'll
buy a ticket to see you play.

If you're a savvy investor, I'll give
you some of my money to invest.

As long as you have the freedom to guide your
own destiny, you have a chance to reach your

full potential – achieving success, however
you define it.

But if someone, say, a government bureaucrat,
told you that your ambition had limits,

that there was a ceiling above which you could
not rise, I doubt you'd be happy about it.

You'd feel like you were in a straightjacket.

Forced equality means less opportunity to
pursue what makes you individually great..

But what about the growing gap between the
rich, the 1%, and the rest of us,

Here's why:
In a free market economy people become wealthy

making what the rich enjoy today into something
almost everybody can enjoy tomorrow.

Now we all have them, but when Motorola manufactured
the first one in 1983 it was the size of a brick,

had a half-hour of battery life, reception
was terrible, and calls were very expensive.

But if no one had bought that $4000 brick,
there wouldn't be a $40 cell phone today.

In the 1960's a computer cost over a million
dollars.

Nowadays, thanks to billionaires like Michael
Dell, we have incredibly advanced computers

Remember what an out-of-reach luxury flat
screen TV's once were?

Today your living room is essentially your
own private cinema.

The free market is about turning scarcity
into abundance.

What was once available to the few is now
available to the many.

Wealth inequality is an important corollary
to that truth.

So, should I resent the people who became
wealthy because they have more money than I do,

or should I be grateful for the economic
system that allows them to enrich my life

and the lives of millions of other people?

This feature of the free market – income
inequality – can appear terribly unfair.

But with a little further investigation, the
real picture becomes clear.

Income inequality makes what once seemed like
impossible luxuries available to almost everyone;

it provides the incentive for creative people
to gamble on new ideas; it promotes personal freedom,

and rewards hard work, talent, and
achievement.

In sum, income inequality signals that individual
liberty, opportunity, and innovation

Pretty good for something that's supposed
to be so bad.

The 1% Club is always open to new members.

And you don't have to be in the top one
percent to have a very good life.

And that, not the existence of the very wealthy,
is what matters most.

I'm John Tamny, editor of Real Clear Markets,
for Prager University.