Despite the setback of the financial crisis, there is no more reason for believing that the free market’s capacity for raising living standards is any more broken today than it ever was.
What is more, in order to work effectively, it needs the incentives that income and wealth inequality provide. We know that taking a few pounds or dollars off the rich isn’t going to diminish incentives very much, but too great a focus on redistribution from the top to the bottom most assuredly will. To brand the wealthy as the “undeserving rich”, as much of the debate around rentier activity tends to, damages these incentives and thereby undermines aspiration, entrepreneurialism and innovation.
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