01 March 2011

Going Out on a Limb

Bob Lefsetz, ladies and gentlemen:

America is number 31 out of 33.  At the wrong end of the scale.  The bottom.  With only Hong Kong and Singapore having greater income inequality.
In other words, that American Dream you’ve been dreaming about?  Odds are it’s not gonna work out.  You’re gonna remain poor.  If you’re lucky, you’ll remain middle class.
I’m not anti-American, I just want a better America.  Where we exist in one homogeneous society. Where a whole segment of super-rich don’t fly in the sardine cans the rest of us do and live behind locked gates.

I have a thought question for those who read my blog:  If America had a truly free market, founded on property rights and free from government distortions, how much material inequality would there really be?

I ask because it’s fairly obvious that America has shifted from a nearly-free market into corporatism, and I believe that accounts for a large amount of the current inequality.  I further believe that a truly free market would lead to even less inequality, because there would be no welfare, corporate or otherwise.  While I think it’s ludicrous to suggest that the free market would lead to economic equality (each person has different interests and abilities, after all), I do think greater economic equality would be the natural tendency of the unfettered market.  Am I off-base in this line of thinking?  If so, why?

On a side note, I think individual welfare is a natural consequence of corporatism.  The government interferes in the market, causing various distortions, which leads to negative effects on the poor, which the government then feels the need to correct, albeit in a relatively synthetic manner.  The same is seen with regulation:  it is a natural reaction to the distortions caused by government subsidies, direct or otherwise.

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