Any study of our current political landscape will reveal a striking polarization along many lines, not the least of which are questions about the benefits and costs of our free market system. While Americans generally credit free enterprise as the basis for our historic economic achievements, many people decry its inherent inequalities in wealth and income and lay the blame on capitalism. These are well-meaning citizens who are moved by compassion and hold that inherent injustices require intervention to correct and to re-balance. They believe that somehow, if the rich could be made less rich then the poor would be less poor.
A 2005 study of 128 countries, 93% of the world’s population, confirmed what most Americans know from experience—that countries with the greatest economic freedom and protection for rights of the individual achieve the highest standards of living for everyone, rich and poor alike. It also revealed that, irrespective of intervention by government, distribution of income and wealth remains persistently uneven across socio economic groupings. This is solid evidence that uneven income distribution in any society is a naturally occurring phenomenon, no doubt reflecting natural disparities in the ways human beings spend their time, talents, and treasure.
It is therefore difficult to argue that an activist government can successfully rearrange the natural order of things, forcing an outcome that goes against human nature. America’s wealth was created through the efforts of individuals striving for success. Take away the freedoms that underpin that success and the incentives that drive innovation will be lost along with everyone’s hope for sustainable prosperity.
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