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Watkins and Brook Return with Book Challenging Inequality Narrative

Is there something immoral about the fact that such great creators and producers as author J. K. Rowling, business leader Steve Jobs, and football star Peyton Manning earned enormous wealth, or should their achievements and resulting wealth be celebrated?

Many leaders in politics and academia offer, at best, a mixed appraisal of those who earn great wealth, claiming (among other things) that their wealth isn’t really earned, anyway.

Usually when Barack Obama mentions accumulated wealth it is to question its legitimacy. On March 22, Obama gave a speech in Cuba, a nation whose people for decades have been subjected by their Communistic rulers to abject poverty and political oppression, largely in the name of economic equality.

In his remarks, Obama conceded that Cuba’s leadership recognizes some of the “flaws in the American system,” flaws including “economic inequality.” Among the “enormous problems in our society,” Obama said, is “the inequality that concentrates so much wealth at the top of our society.” Unlike Marx and many of his followers, who call for violent revolution to strip (or kill) those with “so much wealth,” Obama said “workers can organize” democratically to achieve greater economic equality.

Obama has made greater economic equality a centerpiece of his presidency, and now Bernie Sanders and Hillary Clinton have made it a centerpiece of their campaigns for the presidency.

Whether we look to political debates or to academic discussions, many people these days take it for granted that inequality of wealth is a bad thing (or at least morally suspect) and that politicians should pass laws to take more wealth from the wealthy or to make it harder for people to earn great wealth in the first place.

Don Watkins and Yaron Brook—the team behind the 2013 book Free Market Revolution—do not take the common inequality narrative for granted. Instead, they challenge the notion that economic inequality in a free society is immoral, tackling the issue in the realms of philosophy, history, economics, and politics. The title of their new book indicates their thesis: Equal Is Unfair: America’s Misguided Fight against Income Inequality.

Those wanting a taste of the authors’ work can read the first chapter of their book, download their ten-page summary of their case, or watch the video trailer for the book:

In their first chapter (“Who Cares about Inequality?”), Watkins and Brook suggest that income inequality is a red herring. What really matters is not how much more income or wealth some people have than others, but “the opportunity to make a better life for ourselves,” regardless of where we start or how high we rise (p. 4).

James Truslow Adams referred to “the American Dream” in a 1931 book, Watkins and Brook tell us; in Adams’s words, this was “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement” (p. 5). So the American Dream, properly understood, has nothing to do with achieving results equal to others; rather, it is about each person having the freedom to make the most of his own life.

Central to the authors’ case is that, to the degree that people are free to do so, we produce wealth and trade goods and services by consent; we do not seize a fixed amount of stuff from others. Watkins and Brook summarize the typical stance of inequality critics: “There is only so much wealth to go around, and so inequality amounts to proof that someone has gained at someone else’s expense.” But that view is wrong; “because people are constantly creating more wealth,” the mere existence of income inequality gives us no “reason to suspect that someone has been robbed or exploited or is even worse off” (p. 8).

One of the strengths of the book is its historical account of great producers, whose existence demonstrates that (where freedom exists) wealth truly is earned and either makes others better off or leaves them unharmed. Whether reviewing the rise of Apple Computer under Steve Jobs and Steve Wozniak (pp. 87–91), the great shipping enterprise of Cornelius Vanderbilt (pp. 148–149), or the productive work or numerous others, Watkins and Brook make clear that those who produce great wealth deserve their great rewards.

What, then, is all the fuss about income inequality? Critics of income inequality claim that, despite the apparent mutual gains of wealth production, the fact that some people earn much more than others does somehow harm others. How? Supposedly the fact that some people earn vast wealth somehow prevents others from advancing and suppresses general economic progress (pp. 5–6). But, as Watkins and Brook show, such claims are bunk.

Watkins and Brook summarize:

Some economic inequality critics . . . contend that there comes a point at which inequality undermines progress—and, by and large, they believe the United States has reached that point today.

What do they base that conclusion on? There is no theoretical reason why differences in income or wealth should slow human progress. . . . Instead, many inequality critics resort to statistically based empirical evidence that tries to draw correlations between high inequality and low growth and low inequality and high growth. (p. 110)

Watkins and Brook spend considerable effort reviewing and refuting many such empirical claims, showing that the critics of inequality misuse the data, ignore relevant data, or improperly interpret the data. In these sections the book becomes policy-wonkish, but the authors do a good job keeping the discussion lively and engaging for a general audience.

To take just one of many examples of these empirical studies: the authors address “a widely touted report from the International Monetary Fund (IMF), which suggest[s] that in underdeveloped countries, higher levels of inequality are correlated with lower rates of economic growth.” Based on this study, one leftist referred to the United States as a “banana republic” (p. 110).

The authors reply:

The question is whether inequality lowers growth, and the mere fact that some low-growth economies also have high inequality doesn’t answer that question. After all, these high-inequality, underdeveloped countries are also semi- or full-blown dictatorships, where the rulers use political power to exploit people for their own benefit and the benefit of their cronies. It would be ridiculous to draw conclusions about the merits of an economic inequality that emerges from freedom based on an economic inequality that emerges from theft. (p. 111)

Across the board, Watkins and Brook convincingly answer the inequality critics who invoke statistical studies to try to advance their agenda.

In their fifth chapter (“The War on Opportunity”), Watkins and Brook flesh out their argument that the real problem is not inequality of wealth but political impediments to opportunity. They argue that, although economic mobility remains much stronger in the United States than the critics of inequality typically allege,

opportunity is under attack today, and the culprit isn’t successful people earning huge paychecks. It is the labyrinth of obstacles the government puts in the way of everyone’s success—and virtually all of these obstacles are endorsed by the critics of inequality. (p. 123)

From outlawing jobs below a “minimum wage,” to forcing entrepreneurs to jump through regulatory hoops to start a business, to monopolizing education and driving innovation from the field, to pushing up college costs through subsidies, to taxing away people’s wealth, to punishing producers with arbitrary antitrust laws, to tying up health care in bureaucratic red tape, to imposing a motivation-stifling and dependence-inducing welfare state (to mention some of the main areas discussed), modern American government stifles economic opportunity, Watkins and Brook argue.

Although their treatment of these issues will not persuade hardcore critics of capitalism, their case is sufficiently detailed and strong to at least clarify their concerns and to prompt those open to argument to seriously consider their far-reaching proposals.

In their final chapter prior to the conclusion, (“Understanding the Campaign Against Inequality”), Watkins and Brook delve into the philosophic arguments for forcibly limiting income inequality.

Among other things, they critique the view, developed most forcefully by Thomas Nagel and John Rawls, that a person’s success or failure is fundamentally a matter of luck. Even a person’s “superior character that enables him to make the effort to cultivate his abilities” is a matter of luck, claims Rawls, for it “depends in large part upon fortunate family and social circumstances for which he can claim no credit” (p. 192).

Watkins and Brook respond to such claims:

Something is clearly wrong here. No honest person believes that Woz [Steve Wozniak] didn’t earn the millions he made at Apple by pioneering the first personal computer, but instead just “got lucky” and “won the lottery.” The key error in this argument is that it totally mischaracterizes what it means to earn something. For the egalitarians, the results of our actions don’t merely have to be under our control, but entirely of our own making. (p. 193).

Citing Diana (Brickell) Hsieh’s book, Moral Luck, Watkins and Brook continue, “In reality, responsibility doesn’t require omniscience or omnipotence. It requires only that our actions be voluntary and that we know what we are doing.”

Their remark about the meaning of the relevant concept is particularly apt: “We need the concept of ‘earn,’ not to distinguish people who earn their brains and parents and those who don’t, but to distinguish those who use their abilities and resources to create something from those who don’t” (pp. 193–194).

Ultimately, Watkins and Brook demonstrate, the egalitarian movement is not about defending the poor, achieving fairness, advancing economic progress, or any such positive goal; rather, it is about stoking envy, encouraging the victim mentality, and demeaning and punishing success. They show this from the realm of philosophy, where some theorists enthusiastically say egalitarianism allows us to “exploit [other people] for the common good” (p. 204), to the realm of popular culture, where some people talk about pulling other crabs back into the pot (p. 74), “chopping down the tall poppies” (p. 213), or getting “that bastard” with wealth (p. 210).

Of course, I have highlighted only a few of the many important elements of the book. Overall, Watkins and Brook have written a profoundly important book at just the right moment in history. If many people read and seriously contemplate this book, it can help save the nation from the morally and economically destructive agenda of the egalitarians.

I do think more work needs to be done, whether by this duo or by others, on the academic arguments for egalitarianism. Although Watkins and Brook adequately (if briefly) address Rawls’s arguments about luck, they don’t rebut his claims about the proper conditions for generating social policy (his famous “veil of ignorance”). Nor do they make much headway countering the claims that people with great wealth unduly influence the political system and threaten to undermine representative government. But we shouldn’t obsess about what the book doesn’t do when it does so much so well.

I end on a personal note. My son now is about eight months old. What will the future look like when he is twenty, thirty, sixty? Will his future be his to make of it what he can—or will his achievements be denied to him or taken away from him for the sake of envy masquerading as a moral theory?

I urge you, to help preserve the American Dream, this Land of Opportunity, to buy this book, read it, and share it. The future can be yours to achieve—if you fight for it.

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