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Inequality Is Natural: We Have to Create Wealth to Fight Poverty

By: María Marty - @mariamarty16 - Mar 8, 2016, 12:19 pm

Español“One day, a gardener looked with concern at two trees in a park. On the one hand, there was a sturdy tree with strong branches and healthy green leaves. On the other, he saw a small, sickly gray tree with fragile branches and a couple dry leaves.

He decided to intervene. The gardener spent all morning plucking half of the strong tree’s leaves. In the afternoon, he hung the leaves from the dry branches of the small one. When he was done, he looked up, proud that he now had a homogeneous garden where all trees looked equally green. Justice had been made.”

Any reader can see this is actually not a happy ending. But what may seem obvious even to a small child is overlooked by some economists, spiritual leaders, and international organizations. For them, if we replace trees with people and leaves with money, the gardener’s idea becomes the best solution to end world inequality.

To be sure, there are very wealthy people and very poor ones living on this planet. Some have 15 mansions, others are homeless. Some have caviar for breakfast while others starve. Some avoid paying taxes, others die of curable diseases because they can’t afford treatment.

These problems must be addressed, but those who focus not on poverty but on inequality come up with solutions that overlook fundamental issues and differences.

Important Distinctions

When tackling such a complex issue like inequality or poverty, we cannot just lump every poor and rich person together.

Besides circumstantial poverty, which involves cases like minors, who still don’t produce anything, it’s necessary to distinguish between voluntary and forced poverty.

It’s very different being skinny because I chose to eat less than because someone is preventing me from eating. There are people who have the chance to escape poverty and people who don’t, because the system they live in has eliminated all opportunities.

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Oxfam is wrong on inequality:  we have to create the conditions so that the poor can create their own wealth. (Oxfam)

The wealth of an honest man is also very different from the riches of a thief, a fraudster, or an usurper of rights. It is not the same to make money through a legitimate business than through subsidies and state privileges.

For all these reasons, we cannot compare existing inequality between, for instance, J.K. Rowling and a sun worshiper who voluntarily gave up on making money, with the existing inequality between millionaire Fidel Castro and the average Cuban who suffers under his iron fist.

So which kind of inequalities should we focus on?

Uncouple Wealth from People

According to human-rights NGO Oxfam, “our world is not short of wealth. It simply makes no economic sense – or indeed moral sense – to have so much in the hands of so few.”

This amounts to saying that the park in our example is not lacking green leaves and that it makes no sense for some trees to have so many and others to have so little.

Oxfam detaches wealth from those who produce and the conditions under which that wealth is produced. The report insinuates that, for some magical reason, one group got a larger piece of the pre-existing cake than others. This not only shows that they don’t understand how wealth is created, but that they also disregard every man’s right to keep the legitimate fruits of his labor.

Computers, cars, music, theaters, medicine, jewelry, and books are not given by nature; they exist only because human beings with different abilities and interests thought, persevered, took risks, and acted to create them.

To create wealth, they had to exercise their freedom in an environment where they had guarantees that they could keep what they produced. Someone whose hands and feet are bound will never create wealth. A man whose production is taken away won’t take long to realize that it’s better to stop producing or, in the best case scenario, find a place where he can hide his gains.

Scapegoating

A big part of the problem with inequality, again according to Oxfam, is the tax evasion that deprives the welfare state of funds, thus denying poor countries the resources they need to breach the wealth gap. They argue that tax havens must be abolished and that states must enact policies to better distribute the tax burden.

Continuing with our analogy, the problem apparently resides in some greedy neighbor who hid the pruners, leaving the gardener without a job. The solution would then lie in getting rid of the neighbor and giving the tool back to the gardener so that he can continue distributing the leaves among trees.

The Unseen

Wealth will always be a consequence of an action, never a cause. It’s the leaf, not the root. To address the effects rather than the cause is basically a confession that one does not want to solve the problem, that what one is doing is politics.

Those who are truly worried about the real problem, poverty, should have a close look at the root problem and analyze what makes a tree grow. Then they can work on replicating the favorable conditions elsewhere where trees barely survive.

Oxfam should stop diverting time and resources to the mirage of inequality. Instead, they should focus on denouncing the legal pillaging of citizens’ wealth and the state’s violation of individual rights. They should try to discover and promote the principles, psychological attitudes, and economic measures that have historically spurred wealth creation. Then they would be doing a real favor to those poor people whom they claim to help.

While they keep doing more of the same, the small tree will lack leaves.

Translated by Daniel Duarte.

María Marty María Marty

Maria Marty is an Argentinean with a bachelors degree in social communication, a scriptwriter, and a libertarian. She is the executive director of the Foundation for the Responsible Intellectual (FRI). Follow @mariamarty16.