- - Wednesday, October 8, 2014


Income inequality between the world’s rich and poor has grown to levels not seen since the 1820s, says the Organization for Economic Cooperation and Development (OECD). The Paris-based association of 34 of the wealthiest nations produced a report that’s stoking the fire in the bellies of liberals who decry the state of affairs and demand renewed attempts to redistribute the wealth.

Looking at income levels in two dozen countries over a period of 200 years, the authors conclude that the gap between the rich and poor diminished from the 19th century until it began widening again after the 1980s. Angel Gurria, the secretary-general of the OECD, sounds a call to action. “Let’s also strengthen our efforts to reduce inequality,” he says. “The financial and economic crisis has exacerbated rising inequality and fueled a social crisis.”

Except the report itself shows, things aren’t actually as bad as they sound. When “equality” was on the rise, the report concedes, more than a third of the people on Earth lived in the shackles of communism, usually in grinding poverty without the hope of upward mobility the free market provides. Restoring the Berlin Wall might reduce income inequality, but how would that make lives better?

Economist Stephen Devereux calculates more than 50 million persons died from the famines that resulted from government policy under Soviet rule and China’s Great Leap Forward. Wiping out entire populations, as Mao Zedong and his successors did, is the autocrat’s preferred method of dealing with a wealth gap.

Moving past the headline, the comprehensive study details just how the poor man’s lot has improved in two centuries. In 1820, less than 20 percent of the world’s population could read; today more than 80 percent can. Real wages have increased dramatically, enabling many of the poorest people in the world access to a healthy diet, good clothes and a warm place to live. The world’s per-capita gross domestic product has increased by a factor of 10 since 1820. The lot of women has improved most of all.

In 1820, the average life expectancy in Europe was 36, and the global average was just 29, according to the Human Mortality Database. A child born today in Europe can expect to live to 78. Worldwide, the average person makes it to 70.

The goal of humanity should be to make sure that all people can live comfortably, not that all people have the same thing. Writing in the late 18th century, Adam Smith insisted that an unequal but wealthy society was far more desirable than an equal society, which, by its nature, leaves everyone equally poor.

The danger, Smith noted, is allowing the politics of envy to take over and drive public policy. “The affluence of the rich,” he warned, “excites the indignation of the poor, who are often both driven by want and prompted by envy to invade his possessions.” When that happens, as history amply demonstrates, the greater equality in poverty is followed by an early death.

Allowing everyone an equal chance to become wealthy by their hard work creates a society where the very poorest people live longer, relatively healthier and richer lives. These are lives worth celebrating.

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