« Spending More. Always the Liberal Response? | Main | Local Option Income Tax Dies in Virginia House Committee »

A Thought on the Distribution of Income and Wealth

"Within this framework of equal rules for all, the outcome of the market in terms of income and wealth is fair, for two fundamental reasons. The first is that people basically earn in the market the value of what they produce. Economists say more formally that wages equal the marginal productivity of labor . . . Every one of us can sing, but only Katy Perry has a string of number one hits that young people all over the world want to listen to over and over . . . Alex Rodriquez and LeBron James . . . They earn it, though talent, hard work, and performance.

"This is why it is even wrong to speak of the "distribution" of income and wealth. Income and wealth are not distributed. Income and wealth are produced, and in a fair society they come into the world attached to the rightful owner that produced them. As the late Harvard philosopher professor Robert Nozick wrote, "Whoever makes something having bought or contracted for all other held resources used in the process . . . is entitled to it. The situation is not of of something's getting made, and there being an open question of who is to get it." If income and wealth are not attached to the owner that produced them, they tend not to be created at all.

"Second, what is produced is not taken from anyone else. It is created by the worker. So the income and wealth that such production earns does not come at the expense of anyone else. It is created by the earner. The economy is not a fixed pie with slices being handed out . . . Each worker expands the pie, creating his own slices."

~ Stephen Moore, pages 7-8. "Who's the Fairest of Them All: The Truth About Opportunity, Taxes, and Wealth in America.

HT Barnes & Noble


TrackBack URL for this entry: