How Much Equality Do You Want? – Animal Farm?

The Power of Words

Ayn Rand authored several books that captured the attentions of whole generations of rational American readers during a cataclysmic battle between individualism and collectivism.  She was born Jewish in Russia in St. Petersburg, in 1905; prophetically, this was a year of Revolution that began with the tsar’s Imperial Guard firing on a peaceful workers’ demonstration, killing 200, wounding 800, and ended with the formation of the first Duma (lower house of parliament).

The turmoil continued with the people and the aristocracy battling over the supremacy of the tsar.  Ayn grew up during the First World War, the rise of the Bolsheviks, the fall of the Tsar, the death of Lenin, and the union of the communist soviets.

She graduated from Petrograd State University in 1924, 2 years into the formation of the Soviet Union.  She came to the United States in 1926, and became a US citizen in 1931. She witnessed the collectivism of the USSR, and the rise of Stalin, from America, as the global depression suffocated economies and hope; as the world precipitated into war.

Her plays and books advocated reason over emotion, and individualism over collectivism.  Among my favorites are “Anthem,” and “Atlas Shrugged.”  “Anthem” describes a world in which there is no word for “I” or “me;” “mine” or “yours.”  All personal pronouns are collective.  She demonstrated the power of language in controlling the minds of people.

The Myth of Equality = Good

“Atlas Shrugged” tells the story of talented, creative, productive people whose individual efforts and contributions benefit average citizens; they profit personally from their efforts.  When these people are hounded and what they produce is confounded, and impounded, they escape to a hidden, peaceful, prosperous place populated by others like themselves.  They were “inequal” in the parlance of today.  Their society lost the benefits of their gifts.

George Orwell wrote a book, “Animal Farm,” which was required reading in my high school English class.  It tells the story of farm animals taking over the farm because of inequality.  They establish 7 commandments of “Animalism,” the seventh of which was “All Animals are Equal.”  The operation of “Animalism” proved very unequal.

A Call to Collectivism

Now we have lots of vague talk about “inequality.”

Question:  Where and when have equalities ever existed among humans?

Certainly, humans have been born all over the globe and across a wide spectrum of attributes, but nothing has ever been equal on any measurable attribute.  The only “equality” experiments I know of are utopian communes, and communist governments, none of which have had durable successes, except perhaps, to spread poverty and suffering equally among members and comrades.

The most glaring example of equality today, is North Korea.  I am sure the average American pines and prays to have that thrill of starvation and repression in the name of equality.  Oh, and some comrades are more equal than others.

The Absence of Definition & Context

The term “income inequality” is not a recent invention.  Jean Jacques Rousseau wrote Discourse on the Origin and Basis of Inequality Among Men, in 1754.  He describes two types of inequality:

Natural, Physical– differences one human’s body and another

Ethical, Moral – wealth, nobility, power, personal merit.

He proposes that natural, solitary man is a savage who lacks language, reason, and society. He is not motivated by fear of death, because he cannot conceive of it. He is only corrupted by social association with other men, causing:

  • Competition – best dancer, singer, strongest, fastest, handsomest, smartest
  • Self-Comparison with Others – ranking, e.g. second-best, IQ, “the Joneses”
  • Hatred – envy, jealousy, covetous, fear, anger
  • Urge for Power – dominance, entitlement, control

This led to the source and basis of inequality:  private property.

Angus Maddison, a respected economic historian tracked global income inequality of 25 nations since 1820.  His findings show increases in globalization were the major factor in disparity of incomes.  Retreats from globalization resulted in lower inequality.

The recent rants about “inequality” sound like envy to me.  Envy is not constructive.  The authors neither define equality nor any acceptable level of inequality; they also omit the context, methods and means of achieving less inequality; the ranters do not appear to have a clue about the sources of wealth, business success, or any idea what they are proposing.  This is evident from the example they have chosen to shock the reading public.

The Eight Richest People on Earth have wealth equal to half the people on Earth.  Sounds amazing, until one does the math or looks at who these men are.  Wealth is defined as: $Assets – $Debts.  It does not mean income.  These eight men have $485 billion dollars’ worth of valuable assets more than what they owe*.

Who What Arena Billions**
Bill Gates * Microsoft Computer Software           91.0
Amancio Ortega* Zara and Inditex Fashion Retail           71.2
Warren Buffett* Berkshire Hathaway Investments           73.6
Carlos Slim Helu* America Movil Telecom           49.4
Jeff Bezos* Amazon Computer Retail           67.2
Mark Zuckerberg* Facebook Computer Social Media           50.8
Larry Ellison* Oracle Computer Software           41.8
Michael Bloomberg* Bloomberg Investments           40.0

*Created their own companies

**Bloomberg reports as of 12/31/2016

I am not astonished at these numbers, nor that six of the eight are Americans, nor that five of the eight are in technology.  Look at what they have built.  Think of the services and products they have created and distributed to willing buyers.  Their wealth is the result of creating value for others.  All of them created the companies that represent most of their wealth.

What astonishes me is the fact that 3.6 billion people, (including children) own an average of $135 each.  Who do you know who has $135 total wealth?  Think; who owes more than they own?  Anyone who has a job, rents an apartment, has no savings, uses credit cards, and borrows money to buy a car, or go to college.  During the recent recession, plenty of people were “under water” on their mortgaged homes.  That is here in America; I am sure Asia, the Middle East, India, Central America, South America, and Africa have plenty of poor people with no prospects for improvement.  Whose responsibility are they?

It is unclear what the article is suggesting, but the point is lost on me.  It sounds like envy.

The only thing this article suggests to me is, that if you took every penny from the world’s 8 richest people, and distributed it among the 3.6 billion poorest people, they each would have $135 more than they have now, and we would not have the services and goods these eight produce.

Our Glass House

One thing that stands out about the debate over equality is the way Americans limit their geographic boundaries.  We seem to talk about inequality only within national borders.  Income and wealth disparity is greatest among nations.

If you want to silence a discussion of inequality, mention this: The USA has 4.5% of the world’s population and owns 33.2% of the world’s wealth. We Americans would have to give up 86.4% of what we have, to equalize wealth with the other 7.2 billion people in the world.  Is that what the authors propose?  I doubt it.

One estimate of the total wealth on our planet is $255 quadrillion dollars.  That would mean about $36,000 per person when divided by 7.5 billion people.  However, infrastructure, education, access, communications, logistics, culture, climate, security, resources, health, age, and many other elements are not evenly distributed or available.  Some societies do not allow women to own property or have money unless it is controlled by a man.  Other societies are so corrupt that what they have is stolen from them at every turn.

History suggests that even if all assets were evenly distributed, the money would soon be redistributed to the few who provide the goods and services for the many.

Bloomberg’s listing of billionaires includes 197 whose total wealth is $3 trillion.  I do not know what percentage of the world’s population that matches, but it is about 15% of the $20 trillion national debt of the USA.  That would be $2.86 for every person in the world; $62,700 for each man, woman, and child in America.  What would be the average wealth of an American if we subtracted $62,700 from their net worth to pay the debt?

A Bigger Pie

Consider this:  those who decry inequality pose it as a problem, but offer no solutions.  What would the authors of the inequality protest recommend to raise the wealth of the earth’s inhabitants without confiscating the value created by others?

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