Sunday, 23 June 2019

Forum: Inequality will correct itself over time

Inequality is a natural state of mankind for the simple reason that people are born with different talents and under different circumstances.

Few doubt that more intelligent people will do better economically than less intelligent people, as will children with wealthier parents compared with poorer ones.

In a cosmic sense, this is unjust, but how does one seek cosmic justice in a real world?

One way is to level the playing field. Take from the haves and give it to the have-nots via government taxation and spending.

Another way is to let the system correct itself over time, which is what a free society with strong rule of law and private property will accomplish.

In a complex and dynamic world, the notion that anybody can engineer solutions to complex social or economic problems is sheer hubris.

But I will admit that Singapore and Hong Kong have done remarkably well in managing them.

However, both are city states with small populations, strong cultures and a deep understanding of the power of free markets.

The problem with trying to do it in a large and culturally diverse country like the United States is that it could and often does lead to devastating unintended consequences.

Some problems, inequality among them, are not amenable to solutions, only to trade-offs.

So please, don't try to solve them, let the market do its magic.

Mark Castelino (Professor)


You may want to read Growing pie does not mean bigger slices for all

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