For example, a powerful earthquake may kill tens of people in California, but it may kill hundreds in some less wealthy country, and thousands in an impoverished Third World nation. It is California’s greater wealth that enables it to build better structures to withstand the earthquake’s force. And, it is its greater wealth that facilitates the faster transfer of those injured in an earthquake to better equipped hospitals staffed with more highly trained medical personnel (Sowell).
Cleary, there are innumerable ways in which wealth contributes to the saving of lives. The fact that wealth saves lives is an undeniable truism empirically available to all of us. This makes it painfully difficult to understand why many in the political Left are so adamantly opposed to wealth growth, and so hateful of wealth creators. Let’s be clear, advocacy for policies that inhibit economic growth, infers acceptance of the resulting loss of human lives.
This is a calculation that is never made by proponents of massive business regulations, taxation, and other policies that inhibit economic growth. Yet, we must insist that they offer the calculation. It is simple: populations in poorer countries have a shorter life span. An increase in national income saves lives. Conversely, any slowdown in the growth of national wealth costs lives. The nostrum offered by progressives is to demonize wealth and those that contribute to wealth creation.
Usually, this demonization of wealth is accompanied by some argument for egalitarianism. The most refined arguments use the “Gini coefficient” to show that income in the United States is distributed less equally than in its peer group of developed countries. The Gini coefficient is intended as a measure of a country’s inequality in the distribution of income or wealth. A Gini coefficient of zero expresses perfect equality and a coefficient of one expresses maximal inequality.
One problem with the Gini coefficient is that there are variations in how each nation chooses to report income. The United States, unlike many of its peer nations, does not report government transfers to low-income households. That is, the United States underreports the real income of low-income households by not including Medicare, Medicaid and other payments in its calculations. When the data are adjusted to account for such government programs, the United States’ income distribution is comparable with that of its peers.
Also, taxes on personal income and business profits make up about 49 percent of all U.S. tax revenues. In most developed countries, the comparable average of such taxes is 34 percent. Our approach to taxation punishes wealth producers more than other developed countries that rely on more universal methods like value-added taxes.
A new consideration in the calculations of wealth distribution is the distribution of “knowledge” in society. Measures like the Gini coefficient capture only material wealth. Yet, knowledge is just as important, or more important, than material wealth when it comes to saving lives. Knowledge helps us live healthier lives and, independently of any income inequality, access to knowledge is equally distributed in our society.
In the United States, hardly anyone is excluded from internet access and the enormity of knowledge available online. According to the American Community Survey, over 87 percent of households have a computer, and 77 percent have broadband internet. Most interestingly, over 84 percent of low income households ($25,000 to $49,999) have a computer. This compares with 98 percent of wealthy households (incomes over $150,000) that have a computer. When it comes to the opportunity to learn, we have never been as rich or as equal as we now are.
And yet, the liberals’ demonization of wealth and of wealth producers persists and resists the realities that wealth saves lives and that access to knowledge is evenly distributed in our society. To paraphrase Irving Kristol, these are liberals who have been mugged by reality but refuse to press charges.
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