This week, the Obama Administration announced that its main focus for the coming years will shift from the current (and increasingly prominent) problems with Obamacare to the issue of income inequality in the United States.  According to the left, the difference in income between the “haves” and the “have nots” (formerly labeled by others as the bourgeoisie and the proletariat) is an issue of growing concern.  I’m not so sure.

I’ll be up front about it.  I’m a big, fat, smelly “c-word”: a capitalist. As both a capitalist (which now seems just as polarizing as other words with fewer letters) and as someone who thoroughly enjoys the study of economics, I can very confidently say that this push from the current administration and the left is pointless;  “income inequality” has become a buzz phrase used to keep the majority of Americans at the feet of the government, begging for more.

Differences in income among citizens of a particular region have always existed: from ancient Rome through the Soviet Union, some have prospered while others have become impoverished.  The fact is (and this was very well understood by our Founders) that men and women ultimately work in their own self-interest to benefit themselves and reap whatever reward they can.  As an unchanging, definable characteristic of the human condition, it would be illogical to attempt to change this. And yet, we continue to do so.  Our country was established based upon the belief that more freedoms should be given to the citizens of a state in an attempt to encourage competition and personal excellence than taken away to limit their ability to participate in a free society.  Freedom.  Capitalism.  Prosperity.  They’re great things.

But the left seems more and more convinced that through greater regulation, increased restrictions on trade, and curtailment of free market practices, that the world will be somehow made better. CEO’s will stop making a profit, “greedy businessmen” will start giving more to those in need, those in poverty will suddenly be relieved of their earthly troubles, “green energy” will receive better funding, and the national deficit will be fixed.  (I feel that the last doesn’t need an explanation as to why it won’t be resolved in the near future.)

I heartily disagree with the notion that the inequality in incomes in the United States is a problem.  I align more with Ron Paul’s perspective (which you won’t hear me say often) that the system under which we operate now as a country is hardly real capitalism at all, but rather a type of crony capitalism developed by government intervention, restriction, and preference of certain businesses over others with concepts like “too big to fail” that were introduced in recent history.  The capitalist model works, and has worked in the past, but any problem with income inequality in the United States (perceived or real) will not be fixed by greater regulation on the free market. Regulation was what helped us to arrive where we are today.

A society following this model will correct and fix itself, and businesses will thrive and fail according to their own efforts, their own merits, and the actions of consumers at that point in time.  It is not the government’s place to make sure that people prosper, as it is the responsibility of each and every individual to obtain prosperity for themselves.  The American Revolution didn’t happen because King George wouldn’t ensure the prosperity of the colonies, it was because he didn’t allow them the freedoms to do so themselves.  Our entitlement culture seems to think that the “pursuit of happiness,” which was mentioned as an unalienable right in the Declaration of Independence, is intended to call for government intervention to solve our every need.  

If you need a warning against the dangers of this mentality, let me ask this question: if the government can’t run the Postal Service reliably, what makes you think they should have the authority to choose your doctors?

Even if income inequality was a big enough issue that the Obama Administration should devote its last three years to it, their ideology behind fixing it is all wrong.  Real income inequality looks like nearly 13 million Americans on welfare. Real income inequality looks like 46.7 million people on food stamps.  Real income inequality looks like Central America, Africa, and Russia.  Real income inequality is what happens when the government gets more involved in business than it needs to.

Remove government interventionism, remove government regulation on business, and stop trying to save everyone all the time.  It’s time to shut up and let capitalism do its work.


Conner Dwinell | Hillsdale College | @ConnerDwinell