Acton Institute Powerblog

When Should We Be Worried About Economic Inequality?

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The topic of economic inequality continues to be at the forefront of our current political discussions, thanks in no small part by a president who calls it “the defining challenge of our time.”

But although such concerns are more typically lobbed about rather carelessly and thoughtlessly — cause folks to fret over the “power” of small business owners and entrepreneurs in a mythological zero-sum market ecosystem — there are indeed scenarios in which the rise of such inequality ought to give us pause.

In his book Integrated Justice and Equality: Biblical Wisdom for Those Who Do Good Works, John Teevan challenges those former assumptions, noting the dangers of observing inequality at the surface (“the rich get richer!”) and the destruction of knee-jerk redistributionist policies. Yet he also duly recognizes that what lies beneath that surface can sometimes be rather nasty indeed.

We may not live in the landed aristocratic context of the French Revolution, but distortions to market forces are increasingly promoted, leading to lots of tiny barriers over the long run. When passed and implemented, these are bound to trap the downtrodden and further insulate the rich and powerful. Where the “rich get richer” in this type of setting, problems surely abound.

In the latest edition of his newsletter, Economic Prospect, Teevan adds somewhat of an extended footnote on these matters, explaining that “we should measure levels of poverty (not the relative poverty of equality),” and that by doing so, we’ll be able to discern whether and which conditions are worthy of raised eyebrows:

Inequality can be as bad as the redistributionists say it is IF it is caused by (1) landed elites of the ancient Near East, medieval feudalism, or modern oil sheikdoms. In this situation ‘Robin Hood’ is a reasonable path.

Or if (2), inequality is caused by government corruption such as with Africa where, for instance most of Gabon’s GDP found its way into the late ‘president’s’ bank accounts. This is unacceptable.

Or if, (3) it is caused by a less corrupt, but still unjust crony capitalism such as Russia with its oligarchs or Europe with its national winners (corporations like Air Bus) or America with its green energy pals (Solyndra and its many clones).

For the U.S. there is the tendency of the federal government to pay its workers high salaries with above-market pensions so that many civil servants have high incomes insulated from the accountability or risk of failure that face the rest of us. Of the roughly 2.75 million federal employees (excluding the USPS) about 375,000 people (one in seven) earn over $100,000. Famously, Lois Lerner (IRS salary $177,000) just retired with an annual pension with a benefit package worth up to $100,000.

Think of Lerner as your neighbor. You and nine of your neighbors are each chipping in $10,000 tax dollars annually for her lifetime pension benefits. Ok with you?

For more of Teevan’s views on inequality and justice, see his book, Integrated Justice and Equality: Biblical Wisdom for Those Who Do Good Works, which is now available from Christian’s Library Press, an imprint of the Acton Institute.

Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The City, The Christian Post, The Stream, Charisma News, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

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