Economic Inequality: Facts, Theory and Significance

Policy Reports | Economy | Government | Social

No. 312
Tuesday, June 10, 2008
by David R. Henderson


The entire focus on income inequality is mistaken.  The vast majority of Americans are prosperous because a few million at the top are making a lot of money figuring out how to create new products and new ways to increase productivity.  Many pundits and analysts sift through the data to find inequalities in income, which isn’t hard, then try to figure out how to shave some off.  They usually suggest new government programs or taxes that are destructive of human freedom and prosperity.  Instead they should recognize the many ways that governments hold people down — in the United States and elsewhere — and figure out how to end those oppressive measures.  In the long run, that will make virtually all of us more prosperous and, in the short and long runs, will create a more just society.

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