Robin Hood was wrong
By Emilee Rice
web posted September 16, 2024
We all know that one rich kid who gets on everyone's nerves. They strut around with their designer clothes, their fancy car and their holier than thou attitude. It is easy to want to knock that kid down a peg. Just like it is easy to want to judge company CEOs like Zuckerburg and Bezos for their staggeringly high incomes. Oftentimes, politicians play into that, saying that they will take money from the rich and give it to the poor, as if they are Robin Hood. In a similar way economist Peter Diamond writes in his paper "Addressing The Forces Driving Inequality In The United States" that in order to help the poor out of the lower class we need to give them money, and we need to take money from everybody else in order to do so. While his statistics were alarming and surprising, he fails to look at the bigger picture. Perhaps, he too was bullied by a rich kid, and his vendetta is getting the best of him.
 Diamond |
We have all heard of the American Dream– the ability for people of any background to create a good life for themselves within the United States. The idea was that everyone who worked hard could at a minimum reach the middle class, be able to afford a house and a car, and not have significant worries about putting food on the table. However, as Diamond points out, the United States has higher inequality rates than Canada and most European countries. More startling, one's parents income has a stronger correlation on their future income in the U.S than most western countries. While this is something that should be addressed, I feel that Diamond leaves out some important details. Most importantly that the middle class in the U.S has a higher income and purchasing parity than the middle class in Europe. The same goes for the lower class in the respective countries, essentially the standard of living is simply higher in the U.S.
Diamond states that one of the main causes of this inequality and inability to move forward is globalization, he then mentions the popular argument of the wealth of CEOs of companies. He paints globalization in a negative light and essentially argues that the government should be more involved. I am assuming he means by using protectionist policies such as tariffs and subsidies, however that was not specifically stated. In regard to globalization, I am going to have to side with former UK prime minister Margeret Thatcher when she states that while globalization did increase inequality it still moves everyone forward. Yes, the rich get richer by lets say 10% but the poor are also getting richer. As long as everyone is moving forward, then I would not change our policies regarding globalization significantly.
His other policy idea was of a somewhat similar mindset. He would like to raise taxes, specifically estate taxes, in order to give every 21 year-old from the lower class money. The hope being that the money would help them get out of the lower class, lowering the correlation between parents income and the child's future income. Once again, he is likely factually correct. More people would likely leave the lower class. However, in raising taxes that significantly everyone's wealth will decrease and we would be in a similar situation as Europe. We would in fact have less inequality, but instead of moving everyone forward we would be moving most people backwards.
The word inequality has been thrown around like this awful thing that governments must fix. I understand why people feel this way as no one likes not having things that others do. I, too, get annoyed with the fact that some of my friends have their own cars, their parents can pay for their college, and they get to go on these luxurious vacations. While it can be tempting to want to take from the rich and redistribute from there, doing so actually hurts most people. Instead of focusing on inequality and bringing everyone to the same level, we should continue to try to move everyone forward. In an ideal economy, even the lower class can afford a home, a car, and food– without any government handouts. We will not get there however if we keep taking from the individuals who are paying the lower class' wages. 
This is Emilee Rice's first contribution to Enter Stage Right and she can be reached at emileerice09@gmail.com. (c) 2024 Emilee Rice
