There is undoubtedly a persisting obsession with income inequality, whether this comes from the likes of Thomas Piketty or Russell Brand (whom Kate Andrews very recently wrote an article on), this obsession is unhealthy and, actually, upon closer scrutiny, counter-productive. The focus on income inequality places emphasis on income being the most important component of inequality. Income, however, is only useful as a means to an end, rather than as an end in itself. It is a way of measuring and attaining a form of freedom in modern society. It derives its value from affording the individual who possesses it with capabilities. Ludwig von Mises wrote in a Theory of Money and Credit that money is money by virtue of the fact that it is a medium of exchange (rather than it being legal tender or a store of value, for example).
The obsession with relative income rather than focusing on advancing one’s own, absolute capabilities (and/or others’, for that matter) helps perpetuate the frictions of class differences (the income component of them, at least). Income, whether absolute or relative, is not an end-in-itself for the vast majority of people.
Delving more deeply into the real value of money, we find that freedom and the inequality of freedoms enjoyed by people is at the real heart of the problem. Those who obsess over income inequality shy away from addressing the legally imposed inequality of freedom; the right to use one’s labouring capacity as one sees fit, to spend one’s time as and when they want and for the price they will, the right to interact with our fellows to our mutual advantage without third-party interference, the right to speak freely, think freely and live freely – don’t these legal iniquities require more urgent addressing?
The focus on income inequality is the smoke and mirrors of well-intentioned rhetoric. The focus on wealth redistribution rather than the opportunity to engage freely in wealth creation, on compulsory, ever-more rigid education instead of free thought, on dividing society according to income instead of encouraging social cohesion… this focus provides supposed justification for the legal privileging and normative elevation of income pursuit and, therefore, enables subtle homogenisation and, ultimately, degradation of peoples’ capacity for free thought. Addressing income inequality through redistributive policies is, as is all too often the case with such proposals, conservatism in the guise of social liberalism.