Inequality is a Great Thing

Don Boudreaux over at Cafe Hayek makes an excellent point about income inequality:

If some persons are robbed of their property or are unfairly blocked from pursuing economic opportunities, that’s wrong and should be stopped. If some persons are so poor that they lack life’s barest necessities, they should be helped. (How best to help them is a different issue.) But neither of these problems has anything to do with income inequality. We would want to correct these problems even if doing so would make the income distribution more unequal.

He's exactly right that when a man should be helped is a separate issue from how he should be helped. 'Income equality' is a ruse (for many people, not all), because the desire to help those without basic amenities would still exist even within an egalitarian society. The whole notion of 'income equality' is an attempt to divorce cause from effect, the production of wealth from the earning of wealth.

I want to somehow incorporate the notion of the 'distribution of knowledge' in society, and how income inequality reflects it. But I'm not sure I can make it pithy enough.

Total income equality implies that all services in society are valued quantitatively, relative to money, the same by everybody. That means that water production, diamond production, Yuengling production, education, fine food, fast food, and on down the line, all of it is valued equally by everybody, thus rendering all producers of a product with equal incomes. This is obviously absurd because if I valued everything equally I wouldn't have much of any one thing to enjoy, because my income would be stretched so incredibly thin. If you could somehow partition people to value whole blocks of specific amenities all by themselves, so that they'll get greater amounts of homogeneous valuables, this would still be contradicted by the fact that all people still need water and food (thus ruining a partition scheme), and this demonstrates that some items will by the nature of being human be valued to a greater extent than other items.

In this way, income inequality reflects the vast unequal preferences of each and every member of society.

To deny this would consequently deny ourselves from enjoying our respectively unequal preferences.