Friday, January 05, 2007

The Truth About Income Inequality

The great Conservative economist Thomas Sowell has a fantastic five part series about the ridiculous notion of "income inequality".

Part 1 - Points out how most people don't understand how most things work. Relating to how most people don't understand how people earn a lot of money but are quick to complain about it.

Part 2 - Examines how culture influences income growth or lack of.

Part 3 - Shows how millions of people around the world have risen out of poverty and destitution without the help of government redistribution of wealth.

Part 4 - Shows how economic value makes no sense unless individuals voluntarily agree to trade one thing for another.

Part 5 - Is a continuation of Part 4. My favorite quote from his five part essay comes from part 5:

People who think that they, or the government, ought to be deciding how much income people make are in effect saying that they know the value of people's output better than those who use that output and pay for it with their own money.

How did Bill Gates get his fortune? Not by someone deciding how much Bill Gates was worth to "society," but by innumerable people around the world deciding whether what Microsoft offered them was worth what Microsoft charged.

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