Wealth can be created rather than merely transferred from one account to the other.

What’s Wrong With Inequality?

I’ve always found Jesus’ parable of the talents (a monetary unit) interesting and provocative. The “master” gives three servants different amounts of money. He starts with income inequality! Then he goes on a journey and when he returns, he examines what the three servants have accomplished with what they were given. The ones who created more wealth were called “good and faithful,” while the one who returned the same amount he was given was characterized as “wicked and lazy.” Those aren’t my words; those are the words of Jesus. That servant didn’t squander or lose what his master gave him; he was not fruitful or productive with what was entrusted to him.

As one who cares deeply about those in every income bracket, and especially the poor, I want everyone to know the truths that will set them free to be productive. Much of the rhetoric today creates division, strife, envy, and resentment. This is not of God and will continue to hinder economic recovery.

Jay Richards, my good friend and co-author of Indivisible, collaborated with economist Elise Amyx on this recent article. Understanding these truths will help Americans unite to create more opportunity, jobs, and prosperity. This is the only way we can have job security and the ability to help those in need. The bitterness of class warfare will contribute to our ruin. Please read this and share it with as many people as you can.

 

The debate over income inequality is a perennial one, but President Obama has made it the cause du jour with a renewed emphasis in his upcoming State of the Union speech. He has invoked Pope Francis in his renewed campaign to brand inequality as the “defining challenge of our time.” Even New York City mayor Bill de Blasio is getting in on the action.

These men are not lonely voices crying in the wilderness. A 2013 Pew Research Center poll reports almost half of Americans believe the wealth gap is a serious moral problem.

Poverty is unquestionably a serious concern, but even if poverty were eradicated there would remain an enormous income gap between the family living comfortably on $100,000 a year and people like Oprah Winfrey, Bono and Bill Gates. So what exactly is the problem with income inequality? Some think there is a theological problem. Jim Wallis has claimed—when calling for an increase in the minimum wage—“God hates inequality.”

The Judeo-Christian tradition teaches that everyone is created in the image of God, and so all people, whatever their social status, should be treated with dignity and as equals before the law. There’s a lot about greed in the Bible, but not a single passage of Scripture or traditional Judeo-Christian teaching suggests that income inequality, in itself, is a moral evil.

In the Old Testament, Job and Abraham were wealthy and held up as righteous. In the New Testament, Jesus tells His Apostles they will sit on twelve thrones in the kingdom of God. So far as we know, nobody else will get those thrones. Then, too, in the early church, wealthy members gave out of their wealth to help those in need, but the redistribution that occurred was not a forced leveling but a voluntary generosity. And income differences persisted since the early church met in the large homes of their wealthier members.

So why are so many Americans, including religious Americans, concerned about income inequality?

One reason is an economic misconception. Many assume that the economy is a zero-sum game, in which Peter’s wealth can only come from Paul’s poverty, thus they tend to view a wealth gap as evidence of theft.

But that’s not how a market economy works. We all know this when it comes to, say, smartphones and groceries. Steve Jobs didn’t become rich by stealing iPads from homeless people. He got rich by creating value for others, including millions of people less wealthy than he was. Ditto for your local grocer. The farmers grew the food, but the grocer also generates value by orchestrating a service that allows you to acquire a wide variety of food items safely and conveniently.

Wealth, in other words, can be created rather than merely transferred from one account to the other. Do we really want a society in which those who can create the most wealth are punished for doing so?

Though each of us is equal in the eyes of God, and should be equal before the law, we have diverse skills, passions and physical attributes. Where this is obvious, and where the contribution of those talents is easily grasped, people are unlikely to complain. Few publicly begrudge the incomes of professional athletes, actors and high tech entrepreneurs. The greedy “one percenters” we hear about are invariably Wall Street bankers and corporate CEOs, those doing jobs whose value is difficult to grasp because the contribution is abstract.

There are nations that acted on this animus against finance, labeling the business class as leeches and sending them out into the fields either to be killed or do subsistence farming. Those economies imploded, so apparently high-level business managers actually do perform something useful and hard to replicate.

It would be easy to end there, but there’s another wrinkle that when ironed out reveals a legitimate complaint against Wall Street bankers and corporate CEOs. Some seem to have acquired their wealth through political connections rather than value creation. That’s cronyism, not capitalism. And many Americans rightly view cronyism as a moral outrage, since it substitutes the voluntary exchanges of a market for the coercive power of the state.

Rather than fixating on income inequality, then, we should focus on the real problems: poverty, cronyism and the human capacity wasted due to high unemployment. The significant “gap” is not between the homeless and the Tom Bradys of the World, or between the McDonald’s employees and all the Fortune 500 CEOs. The real divide is between the cronies in Washington and everyone else, including the poor and unemployed. Vilifying and punishing genuine wealth creation will remedy none of these problems.

 

This column originally appeared in Town Hall Magazine. If you would like a copy of Indivisible, the book Jay Richards and I wrote together, order it at Amazon.

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5 comments

  1. Excellent article once again James. Much wisdom and understanding in it that can only come from the spirit of the Lord.

  2. The government is not offering prosperity to the poor. It is just trying to keep them, including 13 million children, from starving.

  3. Government gone wild is the root of the economic problems not the solution to them!
    No real economic recovery will come from inside Washington D.C. (district of corruption). It will not come by bringing those that still have success down, by dividing the nation between have and have nots. These are not solutions, they are recipes for disaster. Only the something-for-nothings believe government can provide people with prosperity they must earn and toil for. The idea that government can guarantee your success is false, only you can determine that. Our present leadership in Washington D.C. is destroying our country. It is a government as mafia, preying on the very people they claim to protect. The something-for-nothings who support these leaders are victims of the policies they have implemented. They are lambs to slaughter as they buried them and their children’s futures in debt!

  4. Every politician needs to read this article! Unfortunately, too may are listening to Pope Francis and Jim Wallis! I just watched a DVD last night of my friend raised under Hitler in Austria. Socialism crept in….just as it is NOW. Common Core Federal Educational Standards are also trying to “Dumb Down” the masses in education and trying to keep children and teens on an “equal level”. The removal of Capitalism is the goal of the progressives! WAKE UP AMERICA!

  5. Man, I wish everyone understood this truth!

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