President Obama Better Hope Life Never Becomes "Fair"

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In speeches the great political thinker and satirist P.J. O'Rourke often addresses the tautological reality that life isn't fair through a retelling of conversations he's had with one of his daughters. It goes somewhat like this:

Daughter: "But Daddy, that's not fair."
O'Rourke: "Honey, you're very cute, and that's not fair. You're very smart, and that's also not fair. Your parents are well-to-do, and that's surely not fair. You were lucky enough to be born in the United States, and that's really not fair. You better hope that life never becomes fair."

O'Rourke's brilliant logic came to mind recently while reading a news account of President Obama's latest whine about the unequal state of the U.S. economy. Obama said:

"The share of national income flowing to the top 1% of people in this country has climbed to levels last seen in the 1920s. That is not fair. It is not right."

To Obama one might comment that he too better hope life never becomes "fair." Indeed, if life were fair, we'd most certainly be living lives marked by unrelenting drudgery.

That's the case because the fact that a great deal of income in the U.S. flows to the top 1% is a wildly exciting signal that the vital and talented few in this country are doing amazing things to remove unease from the lives of the other 99%. Though many in the commentariat bemoan nosebleed concentrations of wealth, the happier truth is that the greater the wealth earned, the bigger the fix achieved by the individual in possession of the wealth. Put more simply, net worth is merely the scoreboard telling us who is doing the most to make us better off.

As Joseph Schumpeter put it in Capitalism, Socialism and Democracy, capitalism "progressively raises the standard of life of the masses....One problem after another of the supply of commodities to the masses has been successfully solved by being brought within the reach of the methods of capitalist production."

In short, capitalism makes the obscure baubles of the very rich, ubiquitous. Powerful evidence that Americans are living Schumpeter's beautiful vision has to do with the fact that the 1% command so much income in the United States. Were Obama more sentient about how economies work, rather than complain about the income share of the 1 percent, he'd instead brag about it as evidence that his policies aren't as bad as his detractors suggest.

Indeed, it's precisely because the distribution of income in the U.S. is unequal and "unfair" that wireless phones that used to retail for $3,995 in the early ‘80s are essentially free today. Henry Ford didn't invent the automobile, but his ascent to 1 percent land in the early part of the 20th century was a direct result of his grand success in making cars affordable to the masses. Grocery stores historically had limited inventories with goods of questionable quality; refrigerated meat and dairy products unavailable to most. That was the case until the Hartford brothers ascended to 1 percent heights through their success with A&P.

If the U.S. were fair in the sense that President Obama seems to desire whereby income were more equal, the certain reality of such a scenario is that we'd all have a lot less. We would because "inequality of income" is merely phrasing that obscures inequality of contribution to our economic betterment.

If readers doubt the above, they need to ask themselves as they read this article most likely on a computer if they'd feel better if billionaire Michael Dell had never decided to bring efficiencies to the personal computer market. If he hadn't, no doubt we'd be more economically equal, but it would also be the case that the computers we're increasingly reliant on would be a distant object for many not in the 1%.

The late Steve Jobs masterminded the cheaper accession of music (remember how expensive CDs, and before that, records, once were?), handheld computers in the form of the iPad that will bring new meaning to the notion of the satellite office, and phones on which we can talk, send messages and watch television on. This is Jetsons' stuff, Jobs died with a net worth in the billions, and the challenge for those troubled by wealth concentrations is to explain how we would be better off today were the economy more fair such that Jobs had never grown obscenely rich.

And while Mitt Romney is sadly reluctant to properly elevate the elite earners whose innovations make life better and better each day, it should be said about him that his wealth is a function of his having put capital behind promising commercial visions (think Staples), all the while buying and fixing companies that had lost their way. Romney is a 1 percenter with all that the notion entails precisely because his hard work made a lot of people in the 99% much better off.

Back to "fairness," those troubled by the unfairness of economic success had better be careful what they wish for. We could certainly achieve a more equal distribution of income through nosebleed taxes on income and capital gains, but if we do, those impatiently waiting for exciting advances in medicine, technology and transportation would be wise to not hold their collective breath. Alternatively, assuming a continued concentration of wealth on a 1% team whose members regularly change, the certain result will be new innovations enjoyed by us all.

As for Obama, a wise adviser might tell him how it's not fair that he's smart (if not misguided), that it's not fair for him to have an attractive wife and two healthy kids, and that it's very unfair that he was born with highly unequal political and speaking skills in a country that generously rewards those talents. Most of all, it's certainly not fair for the rest of us that he's President. Obama better hope life never becomes fair.


John Tamny is editor of RealClearMarkets, Political Economy editor at Forbes, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading ( He's the author of Who Needs the Fed?: What Taylor Swift, Uber and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016), along with Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery, 2015). 

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