Is Inequality a Problem that Needs Fixing?
Max Borders vs. Dr. Snehal Shingavi
Resolved: “Income inequality in a free market is natural and productive.”
Wednesday, June 11th at 11:45am ET | St. Edward’s University | Austin, TX
**Watch the debate below.**
“Instead of worrying about inequality, we should be worrying about the condition of the world's poorest people. Do freer markets help the world's poorest people? The answer is unequivocally yes.”
Inequality -- that is concern about the gap between rich and poor -- is in most respects an intellectual fetish. Instead of worrying about inequality, we should be worrying about the condition of the world's poorest people. Do freer markets help the world's poorest people? The answer is unequivocally yes. In the last 30 years alone, extreme poverty around the globe has been reduced by half. This is a consequence not of fully free markets, but of comparatively freer markets due to trade liberalization and increased entrepreneurship. Indeed, what many people find objectionable about capitalism is not free markets -- which is simply a condition in which people can innovate and exchange voluntarily -- but state capitalism, or cronyism, a condition in which corporations collude with governments to steer transfers the resources of poorer people into their coffers. If inequality is a symptom of crony capitalism, then we should be worrying about the pathology: cronyism -- not inequality per se. Unequal outcomes is a natural feature of any system in which talents, skills and productive efforts are distributed unequally. The question for us is whether such realities work to the benefit of the many -- especially the least advantaged -- versus the benefit of the few. And if we care about alleviating poverty, the question is whether unequal outcomes in a free market work to the benefit of the least advantaged.
Max Borders - Max Borders is editor of The Freeman magazine and director of content for The Foundation for Economic Education (FEE). He is also author of Superwealth: Why we should stop worrying about the gap between rich and poor.
“The gains created by free markets have not been shared evenly, nor have the gains been distributed meritocratically…The result has been a world mired in illiteracy, hunger, disease, poverty, and war as the natural outcome of free markets.”
If we concede the argument that inequality is natural under free markets, all that is left to prove is whether or not it is productive. The problem, then, is in identifying for whom it is productive and to what end does it produce. For instance, it is the case that the free market has been incredibly productive in expanding markets, growing economies, and making stuff. But, if we credit free markets with these gains, then we must also accuse it of other externalities which rarely figure into the balance sheets. Capitalism has been immensely productive of environmental pollution (not simply climate change, but extraordinary industrial disasters); immensely productive of war (as another way to have competition between national capitalists); immensely productive of hunger (more people starve each year now than did under feudalism); immensely productive of inequality. The richest 10 percent of people in the world hold 86 percent of the world's wealth, and just 0.7 percent own 41 percent of global riches, according to the Credit Suisse 2013 Global Wealth Report. The bottom half of all adults in the world own just one percent of global wealth. The gains created by free markets have not been shared evenly, nor have the gains been distributed meritocratically, but rather on the basis of power that has been inherited or hoarded. The result has been a world mired in illiteracy, hunger, disease, poverty, and war as the natural outcome of free markets.
Snehal Shingavi – Dr. Snehal Shingavi is an Assistant Professor in the Department of English at the University of Texas/Austin. Dr. Shingavi received his Ph.D. in English from the University of California, Berkeley in 2008 after earning BAs in English and Economics from Trinity University in 1997. He won the Mellon Fellowship in Humanistic Studies, has published articles in several journals including International Socialist Review, and has appeared as a commentator on programs such as Hardball on CNN.