In politics there’s a stark divide between left and right. Or is there? Could there be more common ground than people think?
Let’s start with an important point that should be obvious, but is often wilfully ignored or disputed. Everyone in politics, be they on the left or right, wants to make the world a better place. In particular, they want to make ordinary people better off. They just have different ideas about how to achieve it.
The big divide in politics often seems to focus on wealth. Specifically, wealth inequalities. Consider a person with average income and a billionaire business tycoon. We look at these two people and we see a huge wealth inequality. Everyone seems to want to do something about it, but the problem we want to solve is subtly different.
Left wingers want to “redistribute” the billionaire’s wealth, so that everyone is equal. Right wingers want everyone’s wealth to increase, so that the average person can enjoy more of the advantages that the billionaire already has.
Both solutions would raise the average person’s income. In the left wing solution, the total wealth would not change, but wealth inequality would disappear. In the right wing solution, the total amount of wealth would increase, but there would still be wealth inequality.
Left wing thinking does not have a manifesto for wealth creation. Right wing thinking has nothing to say about inequality. But both want the average person to become better off.
Let’s throw some statistics into the picture. According to Wikipedia, median income in the USA increased by a factor of 8 between 1960 and 2004.
And in the same period, GDP increased by a factor of 22.
So you could say that everyone benefited. Or you could say that wealth inequality grew. Both statements are factually correct.
But is the wealth inequality really a problem? Let’s return to our average person and our billionaire example (by the way, is the African American woman in the photo a billionaire or an average person?) The average person saw their wealth increase 8-fold in the course of 44 years. That’s an enormous increase! That’s life-changing! And indeed, lives of ordinary people were utterly transformed during the 20th century. The billionaire became richer too, or perhaps more people became billionaires. My question is, “Why is that a problem?”
The reason (I am guessing) why people on the left see inequality as an evil is this. They look at a problem (poverty) and they look at the billionaire. The answer seems so simple. You take the money from the billionaire and you give it to the poor. Problem solved. Anyone who objects is obviously rich themselves and acting out of self-interest.
But I don’t believe that. And I’m not a billionaire.
Firstly, taking money from people is a slippery slope. You’ve violated their right to ownership. What other rights might you violate for the public good? This is a dangerous way of thinking and it tends to lead to bad outcomes.
Secondly, I don’t believe in rich and poor. Society is not static. People who start poor can become rich. People who used to be rich can become poor. The billionaire in 1960 might not be a billionaire in 2004. And the billionaire in 2004 probably started out poor in 1960. But consider this. If people know that if they create wealth it will be taken from them, they won’t create wealth. Then everyone will be poor.
Thirdly, money isn’t a fixed quantity. Wealth can be created and destroyed. In America, between 1960 and 2004 (the dates for which I could find data), an enormous amount of wealth was created. By contrast, in Russia GDP was static or falling for decades. Sharing out wealth isn’t much good if no wealth is being created.
Wealth inequality may be a side effect of wealth creation. If so, eliminating wealth inequality might actually prevent wealth creation, which would be a catastrophe for everyone. Countries that have tried communism have usually ended up in economic ruins. Better to focus on wealth creation for all – a process that is proven to work and has been continuing steadily for centuries wherever liberal economic and political policies have allowed it to flourish.
Both left and right economics provide mechanisms to raise the income of the average person. And that’s why it often doesn’t seem to matter what kind of government is in power – the end result for the average person is often the same, especially if we flip between left- and right-wing policies every few years. The differences only become apparent over longer timescales or with more extreme forms of government.
Yet here’s a simple truth: economic growth makes us all wealthier. It’s self-evident. Almost a tautology. Yet many people just don’t seem to get it.