Thank God for Rich People

I find an almost universal disdain and disgust for rich people that I find hard to justify.  My goal with this post is to dispell, to some degree, the class rivalry which is, above all else, foolish.

There is no doubt that a huge gap exists between the rich and the "poor", but this gap always has, and always will exist, no matter what we do to improve "equity".  But the reasons for this gap are not what you think.  There seems to be this misconception among the less fortunate among us that every rich person "stole from the poor" to get where they are, or that they inherited their wealth.  You will be surprised to hear, then, that a vast majority of the wealthy are self-made.

First, I would like to kill the myth that perfect economic egality is possible.  For those of you who think that economic equity is possible and that communism is the ideal society, I would like to ask a question.  Why has every attempt at communism failed miserably?  The answer is that individuals are better at making their own descisions than a central planner.  For one thing, the individual has more information, and for another thing, the individual has an incentive to make the right descision because the outcome of that descision will affect him, whereas a central planner's descision regarding an individual's life will not affect him.

There is also another reason why communism failed.  Communism (and to a lesser degree, socialism) takes away all incentives to excell, to work hard, and to innovate.  The reasons are simple.  If you make the same amount of mony no matter how difficult your job is or how hard you work, why would you bother working any harder than you have to.  When someone is forbidden to make a profit off of their invention, why would they bother inventing it in the first place?  Contrary to what Marx believed, the "public good" is not enough of a motivator.

This leads us to two very important conclusions.  One, that any attempt to redistribute income results in lowered  productivity, and since productivity is the single measure of a nation's wealth that nation will be poorer overall because of it.  The result is, like the quote at the beginning of this article states, a nation of <i>equally</i> poor people.  The second is a corollary to the first: the same conditions that have produced an income gap between the rich and the poor have also made the nation better off as a whole.  These conditions are called free market capitalism.

Capitalism is what has inspired the centuries of American innovation.  Capitalism is what has inspired America's world-renowned productivity.  Capitalism is what has made America the land of opportunity, and the number of rich people here is a testament to that.  Do eliminate the upper class is to destroy American opportunity and prosperity.

I can't stand it when people complain about how much rich people make.  They don't realize that many of those rich people were just like them at one point.  It was because of the opportunities afforded by capitalism that they became rich.  Without rich people we would not have Microsoft, Google, cardboard boxes, gasoline, or any number of coveted commodities that even the poorest among us enjoy.

People also don't realize that there are habits associated with rich people and poor poeple.  In other words, there are <i>reasons</i> that the rich are rich and the poor are poor.  According to Dr. Walter E. Williams, an economics professor at George Mason University, there is a trend among poor people.  No, it has nothing to do with race (an interesting statement coming from a black man).  It has everything to do with behavior.  In order to aviod poverty, one should do four simple things, stay in high school, get married before having children and stay married, take any job even if it pays minimum wage, and avoid criminal activity.  His research discovered that those in poverty had failed to do one or more of these things, although that doesn't mean all of them did.

Similarly, rich people are rich for a reason.  They engage in behavior that leads to them gaining more wealth.  It may be as simple as being respoinsible with their money by budgeting.  This principle is demonstrated by lottery winners.  90% of lottery winners (who, statistics suggest, are typically poor) spend their winnings within 10 years.  Those who earn their wealth tend to keep it.

So, in principle, redistribution of wealth is taking money out of the hands who use it most wisely and efficiently, and putting it in the hands of those who squander it.  It is taking money out of the hands of those who provide jobs and putting into the hands of those who need them.  This cannot lead to broad prosperity, only to broad poverty.  As a matter of fact, we would all be worse off without rich people, because studies also show another habit of millionares: generosity.  Thank God for rich people.  Without them we would be a nation of paupers, a nation of unemployment, and a nation of technological stagnation.