By Richard Telofski , Special for US Daily Review
With the presidential campaign entering its full phase, there has been much “hub-bub” in the media about the issue of income inequality. That income inequality will be used as a campaign wedge issue is certain. But what isn’t as certain are the causes of American income inequality. The uncertainty is why this issue is so controversial. This article proposes to eliminate some of that uncertainty. Following is an explanation of one possible cause; one which might take the issue right out of the campaign. And the explanation starts, as do many things, with evolution.
Evolution. It’s what makes the world go around. No, I don’t mean revolution, the kind where the globe revolves on its axis, not the kind that involves Occupy Wall Street, either. Although, I’ll get back to the idea of revolution shortly. Right now I do mean evolution. Think Charles Darwin.
Because evolution is both an agent and a product of change, evolution and the adaptation that it produces is the process that makes things stronger: human beings, societies, cultures, economies. Evolution adapts us to changing conditions, usually outside of our control, so that we may not only survive but also improve ourselves. Evolution also enables us to improve society for those who come after us. This idea of evolution is a key concept in capitalism.
I raise the notion of evolution because in pondering the current political debate over income inequality in the United States, I’m reminded of some ideas put forth in “The Anti-Capitalist Mentality,” an extended essay by Ludwig von Mises. Mr. Von Mises, an early twentieth-century Austrian-school economist of the classical liberal tradition, in his essay touched on this concept of evolution. His discourse on this idea may shed some light on the current debate over American income inequality.
In that essay, what Mr. Von Mises referred to was the ability or inability of people to evolve, to adapt to changing economic conditions so that they could prosper from market ebbs and flows. He presented for consideration the ability of people to adapt, or not to adapt, to the capitalist system, which demands that sellers satisfy the wants and needs of buyers. Essentially what Mr. Von Mises was talking about is personal responsibility. If sellers do not decide to adapt to these demands successfully, a most democratic process, then those sellers do not survive. However, if the sellers make a successful evolution with regard to the wants and needs of the marketplace, then they not only survive, but prosper as a result. And that prosperity will extend to subsequent generations.
Mr. Von Mises raises this point concerning those who would prefer socialism over capitalism. He theorizes that advocates of socialism have soured on capitalism simply because they have not been able to figure out, and satisfy, the system of supply and demand. In the current debate over American income inequality, this inability to adapt, to evolve may be at the core of the problem. A Foreign Affairs article entitled “The Broken Contract: Inequality and American Decline,” by George Packer, raises the idea that one reason American income inequality increased in the past several decades was because of macro-economic trends such as global competition, cheap manufacturing in foreign countries, and technological changes. The premise here is that persons who had the skills to which the world was shifting were the beneficiaries of income increases. Those who didn’t have these skills, or who could not recognize that the newly-demanded skills were not in their possession, did not receive the benefit of income increases. (Simple supply and demand. ) Although, Mr. Packer in his article minimizes the effect and significance of these macro-shifts upon American income inequality, I must say that I find them to be significant. I say so from personal experience.
Back in the early 1980s, while deep in a “hard target” job search, I recall mentioning to someone then that the reason I was meeting resistance in my job search was because the country was in the midst of a “second industrial revolution. ” I was correct, although what I saw then actually wasn’t an “industrial revolution. ” The revolution was a technological one, but the realization of the concept, that of a profound change however named, impressed me. So much so that I still remember my declaration of that “revolution” vividly thirty years hence. My skills then weren’t readily marketable. The world had changed on me, as I later found that the world will annoyingly have a habit of doing. All of those macro-trends which Mr. Packer mentioned, and which can be clearly seen today through the benefit of hindsight, were occurring in the early 1980s and impacting my ability to secure gainful employment. But I didn’t become a revolutionary. (Told you I’d get back to the idea of revolution soon. ) Instead, I chose to adapt.
First, I identified what the labor market wanted to buy. Second, I went out and got what they wanted to buy. I obtained additional training. I learned new things, new ideas, ones that would be salable in the marketplace. I didn’t sour on capitalism, placing blame on something or someone else. I didn’t ask for a handout. Figuring out the system of supply and demand, I took personal responsibility and made sure that I would have the qualities that the market sought.
As the U.S. Marines would say, I evolved. I adapted. I overcame. Semper Fi.
As time went on, I found that eventually my acquired skills and new knowledge grew outdated. I realized I had to continually evolve. It was a pain in the neck, but I did it anyway. Sometimes my efforts paid off; sometimes they didn’t. C’est la vie; c’est la guerre. I’m almost certain that many of you have had similar experiences and therefore can relate to what is said here.
So from this personal experience, and extending from the Packer article mentioned above, I will say that one explanation for American income inequality is that it is a symptom of the poor exercise of personal judgement, of personal responsibility. An explanation for American income inequality, an inability to adapt, an inability to evolve and to give the labor market what the labor market demands, is staring us right in the face.
Will this explanation be discussed in the upcoming presidential campaign?
The offer of this explanation, however controversial, may at the most serve to progress the debate over American income inequality. But I’m not counting on this explanation entering into the presidential campaign. Yet, if it did, then no matter how painful this explanation may be to some it might, just might, render the debate itself someday, hopefully, moot.
Richard Telofski is the principal researcher at The Kahuna Institute, Inc., a research group specializing in analyzing the effects of activism on organizations. He blogs about “The War on Capitalism” at www.Telofski.com.