Misunderstanding Wealth Inequality

October 17 was observed as International Day for the Eradication of Poverty, as recognized by the United Nations. This year was the 25th anniversary of the day. I was listening to a show on the radio when I heard the host say there was a need to bridge the gap between the rich and the poor. That got me thinking. I asked myself whether there was indeed a need to bridge the gap between the rich and poor, and a more importantly- how do we go about it?

I once heard a prominent Ghanaian talk about how the middle-class has failed to address fundamental problems in society. The speaker said the middle class had succeeded in overcoming all problems the ordinary Ghanaian faces. If there are power outages, the middle-class have power plants. If there are bad roads, the middle-class have four-wheel drives to cushion bumps. If there are water shortages, the middle-class have underground wells that pump water to every crevice of their homes. In effect, the middle-class are insulated from the day to day troubles of the ordinary Ghanaian. He said a day is coming that Ghanaians will get tired of the middle-class, and on that day the middle-class will have nowhere to run to. A person who lacks will come and grab what belongs to the middle-class.

At the time I heard the above comments, they made sense to me. I thought the rich had a moral duty to take care of the poor; that is exactly what the above story preaches. Now when I ask myself a few questions I see more clarity on the matter. Is the rich obliged to help the poor? Is all that is required for one to help another be that the receiver be poor? Do the values of the receiver matter? Why is it that one has to be rich to inherit the obligation of helping the poor? Should giving be seen as a moral duty or a choice? The argument that if the rich do not help the poor the poor will rob them using force is a flawed argument in any civilized society. It is a demand without exchange; when an armed robber says: “Give your possession to me or I will kill you”, there is no exchange. This argument is a ridicule of rule of law.

One idea most people confuse is the difference between right and claim. A right is a common privilege given to all citizens. For example, the right to free speech. But a right is not a claim on others to enable you to exercise your right. Your right to free speech is not a claim on any media platform to air your views even when it disagrees with you, finds your opinions distasteful, and it does not make economic sense to publish them. However, rights can be claimed from the government if it is a duty the government is to provide for all citizens. An example is the right to police protection. But no such claim can be made on private citizens a person is in no contract with. The poor have no claim on the rich, the same way the rich have no claim on the poor.

When you ask people who talk about bridging the gap between the rich and poor how they intend to achieve their goal, they introduce concepts like income redistribution. It is accepted as a given that the rich must be taxed to help the poor. Individuals who advocate for such measures also seem to think they have a moral high ground. Most people accept that there is some sanctity to being poor. But poor people are just poor. There is nothing inherently special about their situation. Income redistribution stinks of unfairness. Besides, people who advocate such measures undermine the virtue in man to be kind to his neighbour. Human beings do not need central authorities to be generous.

Most rich people work for their wealth. They work longer and harder. It is true that some people bully others in their quest to be rich, but that is a human problem, the same way some poor people are rotten. But if you look carefully at people who are wealthy you will notice that an overwhelming majority of them toiled for their money. Any society that this is false in, is not worth living in.

There are many truths statistics bring to the fore. A typical one is the distribution of income in every society, be it developed or underdeveloped. In an essay by Leonid V. Nikonov titled the Moral Logic of Equality and Inequality in Market Society, a contribution to the book the Morality of Capitalism, the writer explains that income distribution is not equal among the various percentiles of society and that all societies have similar income distribution patterns. For example, according to the Ghana Living Standards Survey Report, in 2006 the top 20 percent in Ghana earned 48.3 percent of national income whereas the bottom 20 percent earned 5.2 percent. The distribution is similar in the United States where the top 20 percent earned almost half of national income and the bottom 20 percent received about 7 percent share of national income for the same period. The only difference between societies is how much the poorest and richest quintiles earn in absolute terms. This makes the poorest quintiles in some countries several times richer than others. It seems the difference in the income earned is as a result of the economic policies pursued by nations, though the political climate also contributes. Countries that have a free market, where there is rule of law and property rights are protected are richer than those who don’t have these systems. The most important measure to ascertain the welfare of a people is not the share of national income in percentages, rather what individuals actually earn, thus their income in monetary terms, because it is their actual income that determines how much they can spend- which influences their ability to take care of their needs.

There is no need to bridge the gap between the rich and the poor. In fact, it cannot happen unless you rob from the rich to give the poor. The immorality of punishing productivity is in all policies of such income redistribution. However the Robin Hood legend appeals to you, Robin Hood was a common thief and there was nothing noble about his actions. What governments have to do is to provide the space for citizens to work freely, and we will see an abundant harvest.

WRITER: Fritz Gyamfi

IMAGE: Google

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