Equality in the age of doubt

Freedom index vs. Per Capita GDP (Wealth)

Il Papa Francesco, Pope Francis, is a profoundly compassionate man. He cares deeply for the people  and abhors inequality.

In his apostolic exhortation, “Evangelii Gaudium,” Il Papa excoriates free market capitalism:

Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality Such an economy kills.

The Holy Father goes on to give a hiding to trickle-down economics:

In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.

While the Pope is a good man, a holy man, he would flunk Econ 101.

First, let’s address inequality.

Our economic system, based on the concepts of individual liberty, private property rights, and free markets, does not guarantee equal outcomes. It does, however, offer equal opportunity. According to the US Census Bureau, the top 5% of black families now make over $148,000 per year. Is that immoral? Or did they strive to earn it?

Let’s take an honest look at inequality. Does anyone who knows anything at all about football resent the fact that Tom Brady makes more money than you do? Are you exercised that Taylor Swift has a seaside mansion and you don’t? Does it keep you awake at night that Kim Kardashian is worth $85 million? (OK, that last one stings a bit).

Are you unhappy that Elizabeth Warren, Hillary Clinton, and the Obamas are all wealthy? You are simply ungrateful.  They want nothing more than your vote and will give you a small stipend in exchange.

On the other hand, Tom Brady made his own fortune based on personal talent and equal opportunity. So did Taylor Swift. As did the top 5% of black families. Hillary? Not so much – she had connections and the Clinton Foundation.

Let’s get back to our Holy Father, Pope Francis. He writes that trickle down theories “have never been confirmed.” This is possibly due to his exposure only to the twisted capitalism of Argentina, where political connections are the key to success. But there is proof that free markets work, and more poignantly, are the single strongest force on Earth to raise the poor from their shackles of poverty.

Please note the graph nearby. It relates two variables: GDP per capita (individual wealth) and freedom of markets. To the upper right we have countries ranking high in freedom and high in wealth. To the lower left are those with little wealth and less freedom. The relationship could not be clearer – less freedom, less wealth. And the corollary – less control, more wealth.

Regarding the nearby chart, countries to the upper right have a high rank of free markets and per capita GDP. These are wealthy countries like the United States, Singapore, Norway, and Switzerland.

At the other end of the spectrum, the lower left, are Zimbabwe, Ethiopia, Central Africa, and the Congo, with highly controlled markets and an excess of poverty.

We have made great progress in raising people from poverty. And we know how to do it. Governments that foster and protect free markets. Governments that pursue and eliminate corruption. Governments that focus on infrastructure and education. The opposite, in fact, of Zimbabwe.

There is so much innumeracy in our electorate, every election is a sad event. If only we could educate each other. The reality, the logic, is so simple. And the outcome, if we were to only reason, would be so much better for us all.